News for the Hospitality Executive
|By Ben Werner, The State, Columbia, S.C.
Knight Ridder/Tribune Business News
Mar. 19, 2004 - The Sheraton Hotel and Conference Center on Bush River Road, home of the Gamecocks on football weekends and a flagship for the area's convention industry, has new management and is likely to be sold.
Lexington County hotel mogul Bert Pooser and his ownership group Columbia Hotel Associates still hold title to the property despite a foreclosure lawsuit filed by its lender in February.
But Pooser's management company, IMIC Hotels, was replaced Wednesday by Interstate Hotels and Resorts of Arlington, Va.
"All parties are engaged cooperatively in repositioning the Sheraton Hotel in the market to include a possible sale," said John Sowards, the lawyer representing Pooser and Columbia Hotel Associates. "In that regard, Interstate Hotels and Resorts has been selected as the manager of the hotel because of its vast experience with full-service properties."
Massachusetts Mutual Life Insurance, which lent Pooser's group $12 million in 1995, filed a mortgage foreclosure lawsuit three weeks ago in the 11th Circuit Court.
"The dispute between owner and lender on the Sheraton has been resolved by agreement," Sowards said.
The agreement does not affect Pooser's other holdings, including IMIC hotels, which owns and/or manages 20 other hotels in five states.
IMIC's plan to contribute $12.5 million and manage the proposed USC Inn is still on track. The site on Pendleton Street, across from the National Advocacy Center, is currently being prepped for construction.
Lexington County court documents suggest disagreement between Mass Mutual and Columbia Hotel Associates over financing of the Sheraton.
Columbia Hotel Associates was locked into a loan with an 8.2 percent annual interest set in 1995 -- a rate well above current interest rates.
Other commercial properties in the past few years have lowered their interest rates, which can vary from near 8 percent for 20 years to 4 percent prime rates for short-term loans.
"We've gotten a lot of business from companies looking to refinance," said Chuck Garnett, president of National Bank of South Carolina.
Part of Columbia Hotel Associate's difficulties could stem from its lending source.
Garnett, though not familiar with the details of Columbia Hotel Associates' mortgage, said insurance company lenders often operate differently from commercial banks.
Insurance companies tend to require longer terms than banks and include steep pre-payment penalties that make it difficult o refinance.
Indeed, according to the court filing, Mass Mutual sought the outstanding principal balance of its loan, $9.3 million, in addition to a pre-payment fee of $1.1 million.
Changes for the Sheraton come at a time of changes in the Columbia hotel market. Columbia is averaging about a 60 percent hotel occupancy rate.
Meanwhile the Sheraton is hardly the only Columbia hotel with rumors floating about. Elsewhere in Columbia:
--The Adam's Mark has been sold and might become a Marriott.
--The Clarion Townhouse Hotel & Suites shelved a planned $15 million expansion plan.
--The future of a planned downtown Columbia hotel -- to be part of the new convention center and financed by the city -- is still up in the air.
And hoteliers are cautiously watching what Pooser does with his involvement in constructing and managing the Inn at USC.
Pooser has pledged to invest $12.5 million in a joint development project between his Lexington IMIC Hotels and the USC Development Foundation. In return, Pooser's group will manage the hotel for 20 years and receive 20 percent of the profits.
The foundation and Pooser expect the Advocacy Center to guarantee to rent at least 80 rooms, four nights a week, for 48 weeks each year.
This hotel, though, will not be like a regular hotel. It will not have a brand name and will not be listed on commercial Web sites such as expedia.com.
As for the Sheraton, no other changes are planned for the moment, Sowards said. Most employees are remaining on the job, and customers should not notice any change.
"We have actually partnered with Interstate Hotels in the past and are delighted to work with them again," Sowards said.
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(c) 2004, The State, Columbia, S.C. Distributed by Knight Ridder/Tribune Business News. HOT, IHR, MAR, IACI,
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