News for the Hospitality Executive
|By Jonathan Shikes, The Press-Enterprise, Riverside, Calif.
Knight Ridder/Tribune Business News
Apr. 8, 2004 - More than 15 months after it seized the Palm Springs Marquis Hotel, the bank that owns the vacant downtown Palm Springs resort has finally found a buyer.
An affiliate of Las Vegas-based USA Investment Partners, which also owns 63 time-share units that used to be a part of the hotel, purchased the Marquis at the end of March, said Joseph Milanowski, president of USA Capital, by phone.
"This isn't our business, so to speak. We are primarily a lending company. But we were aware of the hotel because of its proximity to our time-shares," he said. "With all the stuff that is going on in Palm Springs, it seemed like a good real estate play."
Northwest Hospitality Group LLC, a Vancouver, Wash.-based hotel management company, has been hired to run the 165-room hotel, Milanowski said. He hopes it will be open by October but added, "there is no firm timetable yet."
When it does reopen, it will most likely be under the banner of a known franchise, he said. Northwest Hospitality owns or operates hotels for a variety of brands, including Holiday Inn, Homewood Suites and Hampton Inn & Suites.
Milanowski wouldn't say how much the company spent. But the Marquis was on the market for $10.2 million before it was taken over by El Centro-based Valley Independent Bank in 2003.
John Williamson, a vice president with Valley Independent, wouldn't discuss the Marquis, except to confirm that it had been sold.
Located at Indian Canyon Drive and Tahquitz Canyon Way in the heart of Palm Springs, the Marquis had faced financial problems for years.
The bank foreclosed on the hotel in February 2002 after its owner, Coachella Valley developer Mark Bragg, filed for bankruptcy, citing the travel industry slump following Sept. 11.
Bragg tried to sell the hotel, which continued to operate throughout 2002, but was unable to find a buyer. On Jan. 2, 2003, the bank shut it down.
"I'm happy to see the property in the hands of capable owners," Bragg said Wednesday by phone. "They are financed to survive the things that we were unable to overcome, primarily Sept. 11. It will be good to have that property, which is kind of the heart of downtown Palm Springs, up and active and humming again."
John Raymond, director of community and economic development for the city, said the bank had trouble selling the hotel because it wanted too much money.
"The bank was asking what they were into it for, and they pushed the panic button a little early, because they were selling it themselves," Raymond said by phone. "They were holding out for full price in an environment where hospitality is very soft.
"A lot of people looked at it, but there were a lot of issues," he added, saying that a reasonable price for the hotel would probably be $7 million to $8 million. "It's a nice property, very well situated, but it's gotten a little older, so all the soft goods and furnishings will have to be replaced. That's a million bucks right there."
USA Investment Partners expects to "spend some money" renovating and updating the hotel, Milanowski said, but he didn't have specifics.
The hotel originally had more than 300 rooms, but more than 100 were sold in the late 1990s as time-shares. Another affiliate of USA Investment Partners ended up with 63 of them when their previous owner, Epic Resorts, also went bankrupt.
"Nobody likes a big piece of vacant property in the middle of their downtown," said the city's Raymond. "My fingers are crossed that this has been sold to someone who has the ability to recombine those properties and right the ship again."
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(c) 2004, The Press-Enterprise, Riverside, Calif. Distributed by Knight Ridder/Tribune Business News. IHG, HLT,