You’d never notice from its squat, generic appearance, but just north of Eglinton on Leslie Street sits the headquarters of one of the world’s most luxurious hotel chains. Started in 1960 by Ryerson architecture grad Isadore “Issy” Sharp, Four Seasons Hotels now operates 73 hotels in 31 countries. With more than 25 other properties currently being developed, the Toronto-based chain has attracted the eye of two of the world’s richest men.
This week, the high-end hotel group agreed to accept a private buyout offer of $3.37 billion, orchestrated by Sharp’s private family company, Triples, and firms owned by Microsoft’s Bill Gates and Saudi Prince Alwaleed bin Talal bin Abdulaziz Alsaud. Factoring-in assumed debt, the deal is estimated at $3.8 billion. When the arrangement is approved by shareholders, Sharp will receive a one-time payment of $289 million based on a previous incentive agreement and retain 10% ownership and remain the chair and CEO.
Read-on to see what’s in-store for Toronto’s Four Seasons future.
With travel to major destinations—especially by business travelers—continuing to increase, hotels have become hot properties. Rooms are often sold-out during major conferences, and a key property can become an important flagship landmark. The Four Seasons in midtown Manhattan was designed by famous architect I.M. Pei and a mere standard room there goes for about CAD$950 per night. Other hotels branded by Four Seasons are the Beverly Wilshire in Beverly Hills, the George V in Paris and the Ritz-Carlton in Chicago (some Four Seasons hotels are owned by other investors and only managed by the chain).
Another Toronto-based chain, Fairmont Hotels & Resorts, was recently acquired by the same trust owned by Prince Alwaleed, along with an American investment company. Fairmont represented the Royal York, the Châteaux Frontenac, Laurier and Lake Louise, the Banff Springs Hotel, The Savoy London and the Delta chain, among others.
Prince Alwaleed is the primary investor in the Four Seasons deal, holding 22% of the company with 7.57 million shares. The Gates Foundation holds 1.98 million shares. The partnership between the the Saudi prince and the software mega-billionaire arose out of a 2004 dinner at Gates’ Washington state compound. By teaming-up for the deal, the prince will nearly quadruple his original investment while Gates will double his.
The Saudi royal is the nephew of the late King Fahd and is one of the richest men in the Middle East. Worth about $53 billion, Gates is the world’s richest man, though the Walton Family (of Wal-Mart fame) has rolled-back prices and outsourced enough Chinese labour to be worth an incomprehensible $77.7 billion.
As it has over its impressive expansion, the company will remain based in Toronto. The first Four Seasons establishment was a motor hotel opened in 1961 at Jarvis and Carlton (now demolished), and the chain originally built the noted Inn on the Park, which was located just down the street from the Four Seasons headquarters and controversially torn down in August. The company is also the sponsor of our new opera house, the Four Seasons Centre for the Performing Arts.
Compared to many of its other properties around the world, the Four Seasons Hotel in Yorkville is really showing its age. Unironically described by the company as “elegance without pretension,” the interior was revamped in recent years from it’s strange and outdated powder-blue-and-yellow colour scheme. The hotel found itself having to compete with the new trend for chic boutique hotels like the Hôtel Le Germain, despite still being the prime destination for visiting A-listers and wealthy CEOs. In December 2009, the chain will open a new ultra-luxurious 55-story hotel on Bay, between Yorkville and Scollard Streets.
The site of the new complex was, until recently, a notoriously ugly Ford dealership and includes plans to build a public square adjacent to the beautiful Firehall 11. The development will also include a 30-storey residential tower, where prices are starting at $2.47 million and residents have access to the hotel’s amenities, like room service, valet parking, housekeeping and the spa. A rose garden in the public square will resemble a blossom when viewed from high above.
Previous to the deal announced this week, the company told the CBC that it saw no problem operating two Four Seasons-branded hotels within walking distance of each other. That’s not particularly unusual for hotel chains; the company previously managed the Four Seasons New York and The Pierre Hotel mere blocks from each other until The Pierre changed leasees in 2005. Prince Alwaleed has previously stated that the existing building on Avenue Road will eventually see some major renovations as well.
In January, the Ontario Municipal Board approved the $500 million project despite accusations that the towers would destroy Yorkville’s lowrise charm and shade the yard of Jesse Ketcham Public School. To allay concerns about the school, one tower got taller by five storeys and the other fell shorter by eleven.
Two more well-publicized five star hotel-residences are also slated to open in 2009: the Ritz-Carlton at John and Wellington and the Trump International at Bay and Adelaide.
Images courtesy of Four Seasons Hotels and Resorts, the City of Toronto, and Microsoft Corporation.