Former Molina exec’s new company has big plans for The Breakers in downtown Long Beach
A former Molina Healthcare executive is part of a new commercial real estate company seeking to transform the historic Breakers building in downtown Long Beach back to an upscale hotel.
The $38-million deal creates the prospect of new activity for a prominent Ocean Boulevard property that has been quiet for the past couple years. The former operator of the assisted living facility that previously existed at The Breakers agreed in 2015 to surrender its license to state officials amid claims that senior citizens who lived there at the time received substandard services.
The Breakers building at 210 E. Ocean Blvd. is nearly vacant for the time being, although The Sky Room restaurant is still in business on its top floor. Former Molina Healthcare executive John Molina and other leaders of a new Long Beach real estate company called Pacific6 plan for the building’s conversion back into a hotel to be their first project.
“I’ve always thought that this is just a wonderful, iconic building, and I kept up with what was happening to it because it’s so beautiful,” Molina said.
Molina worked as Molina Healthcare’s chief financial officer until May of last year. That was when company’s board of directors fired him and his brother, former chief executive J. Mario Molina. Molina Healthcare Chairman Dale Wolf said at the time that board members sought new management to improve the company’s financial performance.
Molina Healthcare, which specializes in providing health insurance to customers receiving government aid and is Long Beach’s only Fortune 500 company, has since undergone a nationwide reorganization that has involved some 1,500 layoffs that affected hundreds of people who had worked in Long Beach. The company has also delivered control of 17 former Molina Healthcare clinics to Golden Shore Medical Group, a separate company that J. Mario Molina leads.
A nine-decade history
The Breakers dates back to 1925; it is recognized by city government as a historic landmark. Famed hotelier Conrad Hilton operated the building from 1938 to 1947, a time span that includes the founding of The Sky Room restaurant on the building’s top floor, according to the city’s Development Services Department. The Breakers later functioned during the 1970s as a hotel geared toward senior travelers, and evolved again into an assisted living community in 1990.
California Department of Social Services officials and Sign of the Dove’s management reached an settlement in March 2015 that resulted in Sign of the Dove giving up its license to run an assisted living facility at The Breakers. The settlement followed multiple allegations that residents suffered as a result of poor services, and Social Services’ complaint against Sign of the Dove outlined circumstances that were in line with events described in a lawsuit filed over the 2012 death of resident who died after he cut his leg in a fall. The man’s wound ulcerated before his death.
At the time, Sign of the Dove president Bernard Rosenson denied that people who worked at The Breakers bore responsibility for Flake’s death. Rosenson, who was then 69, told reporters that he agreed to the deal to avoid a default judgement that could have been handed down since he had an appointment to defend a doctoral thesis on the same date as a scheduled hearing on the Social Services’ complaint.
The Costa Mesa-based addiction treatment company Solid Landings Behavioral Health had by then agreed to lease the property despite city officials’ statements that such treatment services could not have been legally provided at The Breakers’ address. A Solid Landings representative had said the firm was considering a plan to turn the building into market rate apartments. That never panned out, and Solid Landings declared bankruptcy in June 2017.
Much work to be done
Pacific6’s six founders include two others with experience working for Molina Healthcare. Others have experience in such fields as advertising, the home warranty business and the legal world.
John Molina said Pacific6 plans to spend $40 to $60 million on renovations. The big unknown in terms of final costs is whether the building will require extensive seismic work, but one thing he said he is certain of is that he and his partners plan to keep The Sky Room open.
The timeline for renovations has yet to be determined, and although Pacific6 has not yet hired an architect for the project, Molina wants someone who can produce a “Hollywood in the 40s sort of aesthetic” with modern amenities.
Molina and Pacific6 also plan to expend private capital on the project.
“I don’t want to have to worry about anyone else telling me what to do. Telling us what to do,” he said.
That said, Pacific6 will also request tax incentives from City Hall to help finance the program, spokesman David Sommers said in an email.
There’s precedent for that happening. The City Council agreed in December to restructure a tax-sharing agreement for American Life Inc., a Seattle developer intending to build another Ocean Boulevard hotel on the undeveloped lot where the Jergins Trust Building once stood.
City officials are also working on a broader tax incentive program for others who may seek to develop hotels in Long Beach.
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