The Ballen family, which has owned historic La Fonda on the Plaza for more than four decades, is passing the baton to longtime family friends.
Jennifer Kimball, the chairwoman of the board, and her brother, Philip Wise, managing partner in Cienda Partners, a Dallas-based real estate investment company, are buying all the assets of the landmark hotel from the heirs of Sam and Ethel Ballen and other shareholders.
The Wise family and the Ballens have ties that date back many years. After the 2007 death of Sam Ballen (whose boots are encased in a hotel hallway), the couple’s five daughters inherited a majority of shares in La Fonda, and Kimball became chairwoman of the board.
On Monday, the two families celebrated the transaction over lunch in the hotel’s restaurant, La Plazuela.
Earlier, the sale was announced to La Fonda employees at a breakfast in the ballroom at which everybody received a La Fonda T-shirt.
Kimball will continue as board chairwoman of the new company, La Fonda Holdings LLC. The change in ownership is not expected to have any impact on the hotel’s 225 employees. The sale is expected to close in the next few weeks.
“The Ballen family decided this was the right time to sell because [La Fonda] will still be family owned,” Kimball said.
The Ballens’ daughters have gone on to careers in education and health. “Our lives took us to different locations,” said Penina Ballen, one of the three sisters who are members of the board (the others are Lois and Lenore). “We had been concerned about the succession.”
Penina Ballen, who recalls watching Fiesta parades from the hotel roof (packed in like sardines) and meeting actor Peter Lorre there, said her father was “adamant that he didn’t want La Fonda to become another Ritz-Carlton or chain hotel.”
Monday’s announcement, Kimball said, “ensured that is not going to happen. … Nothing [about La Fonda] is changing other than who owns it.”
She said the announcement probably relieved fears of employees that a “big hotel company would come in and put in a new management team.”
Kimball declined to give the purchase price. But she did say that the 55 shareholders — who, in addition to Kimball, include the comptroller, the hotel’s head of human resources, the head housekeeper and chief engineer — would receive a nice check.
Kimball, past president of ECMC, an education foundation, was a lawyer for La Fonda before becoming chairwoman of the board.
Cienda Partners, her brother’s company, has other interests in Santa Fe. In 2012, it purchased all remaining assets of Las Campanas, the upscale residential resort development northwest of the city, from a bank after the Arizona developer went bankrupt. The acquisition included building sites, undeveloped residential acreage for up to 319 homes, a commercial tract, several homes and 174 golf memberships. Kimball was one of the other investors.
Cienda Partners also owns some land off Hyde Park Road, said Kimball, whose mother also has a home here.
La Fonda was built in 1922. Formerly a Harvey House hotel, it was bought by the Ballens in 1968. Sam Ballen was new to the hotel business, and there were no other large hotels near the Plaza at the time. The cheapest rooms were $10, Penina Ballen said, and once a year, on Beethoven’s birthday, one of the permanent residents dressed as the composer and played the piano.
During the Ballens’ ownership, the hotel put a roof over the interior patio, built a new parking garage, and added the Lumpkins Ballroom and La Terraza, a banquet room, among other changes.
In 2007, the parent company, Corporación de la Fonda, reached an agreement to purchase stock then owned by Gerald and Kathleen Peters and Peters Corp. The Peters group had owned stock in the hotel since 1985. At one time, Peters, a well-known local businessman, sued Ballen for damages resulting from what he said was a breach of contract over the ownership of the property.
In 2008, La Plazuela restaurant, which occupies the former open-air courtyard, was renovated. In 2013, the hotel completed its biggest renovation since the 1920s, which included new room furnishings and improvements to the pool and Bell Tower areas.
La Fonda has 180 guest rooms and suites, including 15 luxury rooms built around a rooftop terrace. With more than 20,000 square feet, the hotel is popular for conferences and weddings. The hotel is a member of Historic Hotels of America and the National Trust for Historic Preservation. Last August was its best month in history, Kimball said.
In 2013, the hotel received the American Automobile Association’s Four Diamond Lodging rating for the first time.
La Fonda is one of four prominent hotels to change hands in Santa Fe in the past year. In August, Bishop’s Lodge Ranch Resort & Spa was sold to a hotel partnership based in Atlanta. HRV Hotel Partners bought the 1920s resort, which sits on 317 acres between Santa Fe and Tesuque, from Lend Lease Corp. of New York.
In May, Eldorado Hotel & Spa was purchased by Heritage Hotels & Resorts, a New Mexico-based company that also owns Hotel St. Francis, Hotel Chimayó de Santa Fe and The Lodge at Santa Fe.
Late last year, La Posada de Santa Fe Resort & Spa was sold to Joseph C. Smith of 1754 Properties, a Florida-based company.
In August of this year, the Drury Plaza Hotel opened at the corner of Palace Avenue and Paseo de Peralta in the former St. Vincent Hospital. Drury is a family-owned, Missouri-based corporation.
David Loeb, a senior equity analyst covering real estate for Robert W. Baird & Co., pointed out the difference between those deals and the transaction involving La Fonda, where “the family is passing [the property] along to someone they know and trust and have worked with. This is very different from the market-driven investments made with institutional funds from other parts of the world,” he said.
There would have been a lot of investor interest in La Fonda, given its location, Loeb said. But instead of putting the hotel on the market and seeing what kind of capital they could attract, Loeb said, the family wanted the new owner to be “someone who is going to love and cherish this property.”
Not only that, he added, but there’s a lot of competition in this relatively small market. At some point, he said, there will be winners and losers, and “Jenny [Kimball] is making a bold statement that La Fonda can continue to be a winner.”
Contact Anne Constable at 986-3022 or aconstable@sfnewmexican.com.
