Apr 10, 2017

AVANA Capital provides $21MM to fund construction of Lompoc’s first new hotel in over 20 years.

Up-and-Coming Lompoc

Mention to friends you’ll soon be traveling to California and what comes to mind is likely to be Los Angeles or San Francisco. But Californians will tell you, if you visit only those cities, you’re missing out. Many other California locales have much to offer, including one up-and-coming destination that’s rapidly gaining attention.

Lompoc, California, population 40,000, is located on California’s central coast in Santa Barbara County. While it may not have movie stars walking its streets or cable cars climbing its hills, the city still has plenty to see and do.

Art, Wine & Adventure

Home to nearly 40 murals – on street corners, in alleys, and on sides of prominent buildings – Lompoc is becoming known for its big art. These hand-painted frescoes make up a life-sized art museum, adding color and intrigue to the city’s quaint streets.

Lompoc is also getting recognition for its small production wines. More than 40 local wineries have tasting rooms where visitors can sample the latest vintage and talk to the winemakers themselves. Add in a mild Mediterranean climate year-round, and Lompoc is ripe for outdoor adventures from golf to biking, to surfing and even sky diving.

Atul Patel and his family, long-time proud residents of Lompoc, know firsthand the many features that make this city appealing. They’ve been operating hotels in this area for more than 30 years. And soon, they’ll cut the ribbon on their newest development, one they think will help put Lompoc on travel itineraries – Lompoc’s first upscale hotel.

A Hilton for Lompoc

The Patels are building a Lompoc Hilton Garden Inn. It will be a four-star property and the area’s first new hotel in over 20 years.
Amenities will include:

• 3,800 sq. ft. meeting space

• Full-service restaurant

• Lounge

• Indoor pool and whirlpool

• Fitness center

• 350 sq. ft. boardroom

• 158 parking spaces

The Lompoc Hilton will be four stories tall and have 156 rooms, including 25 “urban suites” complete with living room, work station and kitchen facilities, ideal for long-stay guests.

Recognizing the Need

For years the Patels had been aware that Lompoc visitors were choosing to stay at upscale hotels in neighboring towns 20-30 miles away. Lompoc is home to Vandenberg Air Force Base (VAFB), which attracts a steady stream of military, government and corporate guests. These visitors have a per-diem budget that allows them to stay at a full-service hotel with upgraded amenities. For them, traveling a half-hour out of Lompoc is worth the drive.

Individual visitors though, weren’t the only people leaving Lompoc. Because most hotels in Lompoc have fewer than 90 rooms, large groups for weddings, corporate retreats, business conferences and even film crews, were also choosing hotels in nearby cities for their events.

More Demand Coming

The Patels could see the existing need in Lompoc for a larger, name-brand hotel, and knew additional forces were also at work that would increase that demand in the coming years.

Lompoc hoteliers, including the Patels, had just funded a Tourism Business Improvement District (TBID) program to aggressively market Lompoc as a tourist destination.

Additionally, Lompoc recently opened the first-of-its-kind Safety Training Center at Allan Hancock College. It would soon attract firefighters, police, first responders, bomb squads, highway patrols and oil crews for training and certifications. The average class is 2-3 days long, requiring participants to stay at local hotels.

“Our Hilton Garden Inn will give Lompoc its first full-service hotel with conference space to serve the government sector and large groups,” explains Atul Patel. “Individual visitors too, will now have a new, fresh and desirable place to stay. They won’t have to travel 20-30 miles to other cities.”

Paying Tribute to the Family Patriarch

For Atul and his mother, the Lompoc Hilton Garden Inn represents more than a business. Its completion will be a long-held dream realized and a way to pay homage to Atul Patel, Sr., who originally conceived the hotel but passed away in 2009 before it could be built.

The family had purchased 2.76 acres of land for the hotel in 2008. But when the recession hit, the property fell into foreclosure and finally went back to the bank in 2010 before they’d even begun construction.

In 2014, much to the Patels’ surprise, the property came back on the market. Atul and his mother didn’t hesitate. They re-purchased it and immediately rekindled the family dream.

“It’s a tribute to my father from my mother and me,” Atul says. “We’ve been working toward this goal for nearly eight years and will soon have the hotel completed. I know my father would be pleased.”

The Search for Funding

Once the land was theirs, the Patels needed financing to build the hotel. They spoke with various financial institutions but none seemed quite right.

According to Gilda Cordova, Senior Director of Operations and Development for Lompoc Land Holdings and someone who’s worked with the Patels for the past 16 years, “The lenders all looked at the numbers and recognized the potential of this opportunity. But they wanted to make the hotel their own. The family wanted to do it their way as envisioned by Mr. Patel, Sr.”

Through a referral, the Patels discovered AVANA Capital, a finance firm headquartered in Glendale, Arizona, with $350 million set aside to fund community-based projects.

Cordova says AVANA Capital was different than other lenders. “They understood this project was part of a family legacy. It was much more than a business to us; it was fulfillment of a promise we’d all made to Mr. Patel. They got that.”

Atul is quick to agree. “We met with Sanat Patel of AVANA Capital and immediately felt at ease.” Sanat is Co-founder and CSO of AVANA Capital and, despite having the same last name, no relation to the Lompoc Patels.

“Sanat understood the history and significance of the project for us. AVANA Capital has been a great partner,” Atul says.

The Patels worked with AVANA Capital through the Small Business Administration (SBA) program. As an SBA loan, AVANA Capital was able to fund the project at 80% loan to value, whereas traditional lenders will only fund 65%-70% loan to value. “By requiring less upfront capital, we were able to maximize the size and amenities of the hotel, which we think will result in a better property that generates greater revenue,” Atul says.

The Patels also took advantage of the SBA 504 Green Energy program to add a renewable energy system to the Lompoc Hilton. The hotel will have a solar system on its roof that will heat the pool and contribute to the power of the hotel. It will create a 10%-15% reduction in energy costs, which could amount to as much as $60,000 a year.

Choosing a Hotel Flag

Deciding on a brand for the hotel was another big decision. After talking with several franchises, the family chose the Hilton Garden Inn. “They understood our vision,” Cordova says. “We wanted to include more urban suites than is typical because these larger units attract more extended-stay travelers.”

Cordova says they also wanted the exterior design to have a Spanish flair, which would fit with the architecture of Santa Barbara County. “We wanted to make this Hilton unique, with some of our own details in the design and interior décor. Hilton was receptive to our ideas.”

Atul adds they also liked that Hilton is a strong brand with loyal followers. “Its Hilton Honors Rewards program is extremely popular and will help drive traffic to our hotel from day one.”

Jobs and Tax Dollars for Lompoc

The Hilton Garden Inn will inject new life and opportunity into the local community. Atul expects to hire 100-125 employees (60 will be part time initially) to work in the banquet room.

As more visitors come to Lompoc and stay at the Hilton, other small businesses are likely to crop up to serve them, such as restaurants and retailers.

Atul estimates the hotel will pay $600,000-$700,000 per year in bed taxes, starting in the hotel’s second year of operation.

The Tourism Tax will generate another $120,000 from the Hilton, which will then be used to promote the city through the recently formed TBID program.

“We’re excited about what this hotel means for Lompoc,” Atul says. “Our family has been here for over 30 years operating hotels. We feel confident this Hilton Garden Inn will be a catalyst for growth and opportunity in Lompoc, and we’re delighted to be a part of it.”

For their part, AVANA Capital too expresses great enthusiasm. “We support building more hotels like the Lompoc Hilton Garden Inn,” Sanat Patel says. “Our mission is to provide small-business owners like the Patels with the capital they need to make their vision a reality. As a non-bank lender, we have the flexibility to work with entrepreneurs across the country and fund promising new ventures like the Lompoc Hilton Garden Inn that can grow the U.S. economy and generate jobs.”

One Comment on “Lompoc, California to Get 4-Star Hilton Garden Inn”

  1. All the best with this and I am looking forward to seeing it once it is completed. This is a huge project and will definitely bring business to Lompoc. It is like a resort in a small town where you have everything to relax and enjoy in one place.

    I have been visiting Lompoc regularly since I was 6 years old and have enjoyed staying in this little town.

    Mr Patel Snr will be very proud and will look down on his son and wife’s hard work and dedication with pride.

    All the best and good luck for the future.

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