Caruso Affiliated will pay the entire settlement, according to an indemnity agreement between Caruso and the city.
Patel on Tuesday said he will continue to operate the hotel until Dec. 31.
Caruso Affiliated spokeswoman Jennifer Gordon said the Americana expansion — which will include additional retailers, a new pedestrian entry and improved landscaping — still requires city approval, and it is unclear when the work will be completed.
The price paid for the hotel remained under wraps Tuesday, but in court papers Patel estimated its value at between $15 million and $17 million. Its assessed value is $4.9 million, according to county records, but in December, Patel rejected a $6-million offer from Caruso.
Caruso has said he plans to spend upwards of $40 million on the addition of up to 140,000 square feet of new retail space to a mall that already has 75 shops and restaurants, an 18-screen theater, apartments and condominiums.
“We are very pleased to have reached a swift resolution,” Caruso said in a statement. “Our agreement brings us one step closer to achieving our goal, which is to redevelop the property in a way that enhances the downtown business district and provides important new revenue to the city.”
Also in a statement, Patel thanked property-rights advocates who joined him in opposing possible eminent domain proceedings by the city had he continued to hold out.
“Although I felt that I had the right to remain, with the support of these groups, Mr. Caruso made me a fair offer, and I accepted,” Patel said.
Caruso is also on the hook for a judgment in a related case against both the developer and the city. That case was brought by the owners of the former recording studio Backroom Entertainment, which was in a building adjacent to the Golden Key Hotel.
In January, a judge determined Caruso and the city were at fault for driving the studio out of business. A jury trial to determine damages is slated for April 19.
Caruso acquired the former recording studio building in January as part of his expansion plans.
The growth at the Americana comes as Caruso ramps up for expansion elsewhere in the region, including a new residential tower near The Grove shopping center in West Los Angeles and a new retail center in Arcadia.