News

Larry Ellison buys Epiphany Hotel in Palo Alto

Oracle co-founder takes ownership of prominent downtown site

Larry Ellison, one of Silicon Valley's wealthiest and most extravagant high-tech titans, has added to his collection of riches one of downtown Palo Alto's most visible properties: the Epiphany on Hamilton Avenue.

Ellison, the yacht-obsessed, adrenaline-chasing co-founder of Oracle who in 2012 made headlines when he bought the Hawaiian island of Lanai, is the new owner of the Epiphany, an 86-room hotel that opened last year in a remodeled building that once housed Casa Olga, a convalescent home. The hotel is also home to the restaurant Lure + Till.

The new owner of the hotel is PA Hotel Holdings LLC, a limited-liability corporation owned by Ellison, according to Joie de Vivre, the hotel conglomerate that manages Epiphany. The seller was the private equity firm Angelo, Gordon & Co.

While Joie de Vivre didn't disclose the amount, Ellison reportedly paid $71.6 million for the hotel, according to the Silicon Valley Business Journal, which first reported the sale.

The move comes at a time when Palo Alto's hotel climate is particularly hot, with hotel-tax revenues surging and vacancy rates at historic lows. The current city budget notes that "demand for Palo Alto rooms is strong," spurring construction and planned construction of several new hotels. This includes two Hilton hotels, which opened for business this year, and the Westin Annex, which is expected to open next year or in 2017. Overall, the city's hotel-tax revenues are expected to jump by about 32.4 percent between fiscal year 2015 and 2016.

"A vibrant business and tourist environment has led to a surge in hotel bookings from San Francisco down through the Peninsula to San Jose," the budget states.

While the price tag may seem steep by most measures, for Ellison it is a relatively ho-hum investment. Forbes has recently named him the third richest American, with an estimated wealth of $50 billion. The Woodside resident stepped down as CEO of Oracle in September of 2014 and now reportedly owns real estate in Malibu and 98 percent of Lanai, which, according to Forbes, includes every hotel room on the island.

Despite the change in ownership, for the Palo Alto hotel it will be "business as usual," said Brittany Ellish, spokeswoman for Joie de Vivre.

"The hotel will remain The Epiphany, a Joie de Vivre Hotel, and it will continue to be managed by Joie de Vivre Hotels," Ellish said in an email.

Comments

15 people like this
Posted by Commentator
a resident of Professorville
on Sep 14, 2015 at 10:54 pm

Why comment? Who cares?


Like this comment
Posted by musical
a resident of Palo Verde
on Sep 14, 2015 at 11:20 pm

Feb 4th-7th booked solid already. Nearly $1000 per night.


5 people like this
Posted by resident
a resident of Another Palo Alto neighborhood
on Sep 15, 2015 at 6:23 am

Now that he has turned his attention to Palo Alto from Malibu I am surprised
he didn't buy the Varsity Theatre to keep SAP out of there and their strategic high profile HANA sign on the marquee on University Ave and their accelerator space, right in Ellison's own backyard.


24 people like this
Posted by YSK
a resident of Community Center
on Sep 15, 2015 at 10:29 am

Ludicrous prices. I feel bad for the people who were displaced. Since this most recent bubble has blown up, no one seems to care much about those who are less fortunate.


15 people like this
Posted by musical
a resident of Palo Verde
on Sep 15, 2015 at 11:23 am

Still cheaper than a room at the hospital.


25 people like this
Posted by Emily Renzel
a resident of Crescent Park
on Sep 15, 2015 at 11:55 am

Few will remember that when Mr. Kulakoff got a high density Planned Community zone on this property for affordable elderly housing. He named it Casa Olga after his mother. Now the senior housing has become a luxury hotel and where are the benefits of that original Planned Community zone? Developers just have to wait long enough for staff to turn over and the rest of us to forget and then boom, another densification.


1 person likes this
Posted by Curious
a resident of Green Acres
on Sep 15, 2015 at 12:24 pm

@musical: Why is the Feb 4th-7th booked solid already? Is something special going on at that time?


3 people like this
Posted by resident
a resident of Another Palo Alto neighborhood
on Sep 15, 2015 at 12:29 pm

Another issue with respect to the conversion to a luxury hotel was the
parking requirement. I still can't figure out how much was paid to
the Downtown Parking Assessment District?


2 people like this
Posted by Rudy Wang
a resident of Midtown
on Sep 15, 2015 at 12:42 pm

Note to Curious:

1st weekend of Feb, 2016.
Web Link


Like this comment
Posted by Roland Kelly
a resident of Menlo Park
on Sep 15, 2015 at 12:47 pm

Feb 7, 2016 Super Bowl 50 !
www.levisstadium.com/events/event/super-bowl-50/

Should be a busy time in the Valley !
I assume this is why the hotel is booked solid then :)


3 people like this
Posted by PA
a resident of South of Midtown
on Sep 15, 2015 at 12:49 pm

@Curious: I'm thinking it's because of Super Bowl that weekend.


16 people like this
Posted by Jerry Underdal
a resident of Barron Park
on Sep 15, 2015 at 1:24 pm

Jerry Underdal is a registered user.

@Emily Renzel

"Now the senior housing has become a luxury hotel and where are the benefits of that original Planned Community zone?"

Really good question. If that project had been developed and owned by a non-profit agency like PAHC, Eden Housing or Midpeninsula Housing would it have been permanently sustained as affordable housing for seniors and disabled persons? According to TheRegistry, a SF online real estate news outlet, Casa Olga served about 9,000 seniors and disabled persons over about 35 years before it shut down and was sold to become a luxury hotel. What were the conditions for receiving the PC zoning variances?


17 people like this
Posted by Emily Renzel
a resident of Crescent Park
on Sep 15, 2015 at 2:21 pm

I do not remember all the details of the Casa Olga Planned Community approval, but I believe there was a height exemption, parking exemption and perhaps more units than would otherwise have been allowed. It was believed at that time, and partially true, that seniors didn't have as many cars as the general population, and of course, more units would in theory make each unit more affordable.


8 people like this
Posted by Crescent Park Dad
a resident of Crescent Park
on Sep 15, 2015 at 2:45 pm

Don't forget that Casa Olga was losing money at an unsustainable rate.


2 people like this
Posted by Hmmm
a resident of East Palo Alto
on Sep 15, 2015 at 4:32 pm

Hmmm is a registered user.

What's remarkable is that Big Larry has stuck with seeing through his various environmental projects.


4 people like this
Posted by Curmudgeon
a resident of Downtown North
on Sep 15, 2015 at 6:01 pm

"the senior housing has become a luxury hotel and where are the benefits of that original Planned Community zone?"

A PC that fulfills its public benefits is a unique and very bad example. Can't have those laying around, giving our citizens expectations for the others. No wonder our developers drove such big nails into Casa Olga's coffin.


5 people like this
Posted by The Diff between God and Larry
a resident of Another Palo Alto neighborhood
on Sep 15, 2015 at 7:18 pm

Mere pocket change for old Larry!


8 people like this
Posted by Welcome to ... ??
a resident of Charleston Meadows
on Sep 15, 2015 at 9:16 pm

"Don't forget that Casa Olga was losing money at an unsustainable rate. "

Here is an "epiphany" for you: caring about elderly, sick, and underprivileged always means loosing money. That is why they call it "caring", "charity", and such.

This is where we live ... Got old and/or sick (if you are not Larry, of course) - crawl in the hall and die.
Congratulations. I hope you do not need a little care when you are old and sick.


1 person likes this
Posted by Chance
a resident of College Terrace
on Sep 16, 2015 at 12:15 am

Ellison has enough money to give about $156 to every man, woman and child in the U.S.


3 people like this
Posted by musical
a resident of Palo Verde
on Sep 16, 2015 at 12:25 am

Or $42 after taxes.


3 people like this
Posted by jui
a resident of University South
on Sep 16, 2015 at 2:49 am

What kind of town or country, for that matter, have we become, when the elderly, sick and disabled have to live in fear of being evicted from their modest homes with the possibly of nowhere else to go. The building is then sold and becomes a luxury hotel for the beyond rich fun and games and then some multi-billionaire dude buys it for "pocket change" for even further profit. So much for "making the world a better place" and "giving back to the community". Another thing, what's with the name "Epiphany" as if and why do the developers, in a rather self-serving way, claim for themselves a beloved public icon, the tall Landmark Redwood tree, EL Palo Alto and stamp it on their building? The real tree is not that far away and you can even read a musty old plaque there, which actually pays respect for it's founding.


2 people like this
Posted by musical
a resident of Palo Verde
on Sep 16, 2015 at 4:32 am

You're looking at it the wrong way. Ellison just ADDED $71.6M to the local community. Now ask what the seller plans to do with all that new money. Probably pay off all the loans, which are financed by the funds that ordinary people have been putting away for retirement. All the rich fun and games are pouring 14% TOT directly into Palo Alto's coffers every single day. Are we as a City spending it wisely?


5 people like this
Posted by Hadleyburg
a resident of another community
on Sep 16, 2015 at 7:39 am

I did not realize that Palo Alto had a $1000/night hotel.
The city is well on its way to becoming Manhattan with good weather, minus any cultural advantages (other than the House of Foam).
I agree the hotel tax revenue is important (especially given California's idiotic income and property tax system).



3 people like this
Posted by mauricio
a resident of Embarcadero Oaks/Leland
on Sep 16, 2015 at 8:35 am

mauricio is a registered user.

__What kind of town or country, for that matter, have we become, when the elderly, sick and disabled have to live in fear of being evicted from their modest homes with the possibly of nowhere else to go__

A Republican Utopia.


2 people like this
Posted by anon
a resident of Evergreen Park
on Sep 16, 2015 at 9:32 am

Maybe emily Renzel can clarify this…..I believe one of the problems with PCs is that the public benefit is not for
perpetuity, but something like 25-30 years. This make the public benefit years far fewer than the life of the building.
Is it possible that the public benefit that provided care for the elderly simply ran out?

if in the end we retain Pc's the benefit should run with the life of the building.


5 people like this
Posted by Jerry Underdal
a resident of Barron Park
on Sep 16, 2015 at 10:04 am

Jerry Underdal is a registered user.

Let's look at a recent example, the PC (Planned Community) Maybell/Clemo proposal for 60-units of low-income senior housing . The public benefit offered was the affordable housing. If I understand correctly, that would have been locked in for 55 years, and even at that point it could only be changed to market rate if there was no longer a need for affordable housing for seniors in Palo Alto.

There were lots of problems with the project, but the legitimacy of the public benefit offered was not one of them.


1 person likes this
Posted by Crescent Park Dad
a resident of Crescent Park
on Sep 16, 2015 at 5:38 pm

@ Welcome: No need to get personal.

I was merely pointing out a fact - that (unfortunately) Casa Olga went out of business because it could not receive enough (or timely) payments/reimbursements (from the state) to cover its costs. See the following article (link):

Web Link

from you: "Here is an "epiphany" for you: caring about elderly, sick, and underprivileged always means loosing money. That is why they call it "caring", "charity", and such."

Casa Olga was not a charity organization - it was a family business and it solely relied upon state reimbursements to stay open. The family did not ask for or depend upon charitable donations and, chose to close the operation on their own.

You should do a little research before throwing your next stone.




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