Rebuilding Shangri-la

When the Ojai Valley Inn was forced to close for renovations, it faced losing most of its work force. Instead, manager launched the ultimate job-retraining program.

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When you walk into the Ojai Valley Inn & Spa's $75-a-head Maravilla restaurant, you probably won't be told that the statuesque woman who seats you also painted the walls of your suite, or that the busboy installed the crown molding and the flower arranger wired the building's electrical panel. Nor will the menu mention that the slice of cake you order for dessert was decorated by the woman who welded the scrollwork on the iron balcony outside the window. But the Ojai Valley Inn may be the only resort hotel in the country that was actually built by its employees; it's certainly the only employee-built resort to make Condé Nast's Gold List.

Here's how it happened:

In 1937, Frank Capra chose a long shot of the dramatic Ojai Valley to stand in for Shangri-la in the movie Lost Horizon--and even the hotel itself was a strangely timeless place. It was originally built as a private golf club in 1923 by Ohio industrialist Edward Libbey, who hired architect-to-the-stars Wallace Neff to design a Mediterranean-influenced clubhouse with guest rooms. For a while it was a fashionable club for L.A.'s elite. Then, for a longer while, it wasn't. In 1987 the Crown family, longtime club members from Chicago, bought out the other members and turned the property into a resort hotel.

When managing director Thad Hyland first saw the inn, it still had a shabby-genteel charm about it. "Ten years ago we were a golf resort for retirees at $90 a night," he says. "And we didn't have any money. But that's the best place to be at, having to be creative. All great ideas come on a shoestring."

Hyland persuaded the Crowns to build a lavish, Moroccan-themed spa. He also added restaurants and new, unusual services. Now you could send your kid on a fishing trip and spend an afternoon walking the maze in the meditation garden, or an afternoon on a horseback ride guided by the cowboy who used to tend the sultan of Brunei's stables. (The sultan's wives could sometimes be found occupying the spa's $5,400-a-night penthouse suite.) Within a few years, Hyland had done for the Ojai Valley Inn what Tom Ford did for the house of Gucci; he took a venerable if somewhat musty brand and turned it into one of the hottest in the country.

But by early 2002, Hyland was facing a dilemma, as was every other manager in the domestic travel industry: how to weather the precipitous drop in business following 9/11. While many of his peers lowered rates and launched special promotions, Hyland decided that the best move for the inn's long-term prosperity would be to shut it down. Not completely, and not forever, but long enough to undertake a top-down, ground-up renovation of the 80-year-old property, which was growing ever creakier despite its newfound glamour. "It was the chance to do it all at once," says Hyland, who has a passion for building and renovating, probably because his father is a fifth-generation architect. "At many hotels you see those construction signs that say, 'Pardon our dust.' Well, nobody really pardons your dust."

But as big a problem as the tourism slump was for Hyland, shutting down 140 of the hotel's 207 rooms and five of its six restaurants was going to be an outright catastrophe for the staff. A lot of coastal resort hotels provide transient employment to immigrants entering the work force and young people looking for a job that is compatible with surfing. Not Ojai Valley. The inn's location and culture make it different.

Reviving a Faded Beauty

By 2002, the inn had become fashionable all over again, but it needed major repairs. The question was what to do with staffers while the work was being done. "To re-create a staff like this, with their level of training and experience, would take 15 years," says managing director Thad Hyland.

Ojai is a sleepy town of 8,000, isolated despite being just 73 miles from Los Angeles. Ringed by dramatic mountains, it sits 700 feet and half an hour of winding two-lane highway above the Pacific coast. It has retained its charm in part because it is not freeway-close or commuter-friendly. The inn is the town's largest employer, deeply woven into the social--and financial--fabric of the local culture. "We were talking about 550 jobs," says Hyland, "but that really represents 2,200 lives when you count whole families. When you find out that the school district is worrying about losing funding because they've heard you might close, you see that everything is connected."

Many of the employees had been at the inn for decades. Some had never worked anywhere else. "How do you tell 81-year-old Millie Reeves, after 36 years on the floor as a waitress, 'I'm sorry, you don't have a job'? I can't do that. And the owners didn't want to do that because they have known these people all their lives, too."

Hyland recognized that this human infrastructure was literally irreplaceable--both culturally and economically. "The selfish side of the equation," he says, "is that to re-create a staff like this, with their level of training and experience, would take 15 years."

Georgia Deutsch, Ojai's florist, learned to
pull Ethernet cables.

If there was anyone left in town to train, that is. A recent run on real estate had turned Ojai into a popular Malibu alternative; nouveau townies like Ted Danson and Larry Hagman had led the charge that drove property prices through the roof. During the inn's renovation, the least expensive home for sale in the area was a 650-square-foot ramshackle cottage in Oak View, where many working folk currently live; it was listed at just under half a million. Many of the service workers who lost their jobs would have to leave town, and once they left, there simply wouldn't be any affordable housing for them to return to.

So Hyland set about figuring out a way to both close the inn and keep on as many employees as possible. He worked with other top hotels to find temporary placements for some, a program he describes as "a kind of junior year abroad." He helped others apply to college. Then he had another idea: Why not let some of them help out with the renovation itself?

"When Thad suggested that we retrain the hotel employees to do the renovation work, I thought it was a nice idea that would never work, and I said so," says Brian Skaggs, chief engineer on the $70 million renovation project. But he agreed to try. "And I'm happy to say that I couldn't have been more wrong."

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