Apr. 17, 2005 --One of Red Lodge's fanciest hotels, the 112-year-old Pollard Hotel, plans to reopen the Friday before Memorial Day, just in time for the summer flood of tourists.

Reopening is good news for Red Lodge, which depends on the Pollard's draw. The hotel closed without warning in late February and its fate has been the talk of the town.

Dave and Ann Knight, who live in Newington, N. H. bought the hotel in 1991 and then completely renovated the 39-room structure.

In late February, Knight said he visited his business and didn't like what he saw.

"The past tenant was not meeting her obligations under the lease," Dave Knight said. "This had gone on long enough for me to say, 'It's time to close the doors.' " The lease was to run out in March 2006, Knight said, and he decided it made no sense to continue another year.

Knight also admitted making some management errors.

"It's too far away from home to watch and that's a mistake," he said.

Meanwhile, the woman who leased and managed the Pollard for the past four years, Sharon Nix, has sued Knight and four of his companies claiming breach of contract and 10 other violations.

Hostel hostilities

The March 25 lawsuit filed in Carbon County District Court claims Knight violated the contract that allowed Nix to manage the property with an option to buy.

Nix said she later decided not to buy.

In lieu of salary, she said she was promised a share of the profits when Knight sold the hotel. Instead, she said she was illegally locked out.

Billings attorney Steve Mackey, who represents Nix and her companies, is seeking punitive damages on charges of fraud, negligence, conversion of personal property and improper eviction.

"The law doesn't allow a person to simply lock out the tenant without any advance notice or proceedings," Mackey said.

Knight said one of his companies, Hotel Company of Red Lodge, owns the Pollard and has been served with the lawsuit and is preparing a response with substantial counterclaims.

"For example, she was obligated to pay real estate taxes and is two years in arrears for more than $65,000 in the town of Red Lodge," Knight said. "This is one of many unpaid bills."

Legal bookings

While managing the hotel for the past four years, Nix said she invested $500,000 to improve the facility through her Palisades Hotel company.

The complaint said Knight promised her at least $100,000 and up to half of the net profits above the minimum price of $3.65 million when he sold the hotel.

In the complaint, Nix said she wasn't making regular lease payments to Knight.

"We agreed that Palisades was going to settle up at the end of the lease," she said.

Three years ago, The Pollard's full liquor license was sold to Palisades.

Another of Nix's companies, Fest Events, hires Palisades and its liquor license to cater area events. These include the Taste of Montana in Red Lodge and Mountain Music Festival.

Knight also is storing and denying her access to tents, a stage and a pickup truck, Nix said, needed to host Taste of Montana next month.

Again, Knight still is preparing his responses and counterclaims.

Check out time

In mid-February, their business arrangement grew colder.

Knight said Nix owed him about $380,000.

"Knight then made the offer to drop his demand in exchange for Nix's liquor license," the complaint said.

Nix countered that Knight owed her money for improving the Pollard.

A second meeting resolved nothing.

After changing the locks, on the morning of Feb. 24 Knight locked the Pollard and the adjoining health club.

"He would not allow us to call any customers or cancel any reservations," Nix said.

Customer complaints, she charged, were referred to her at her adjoining business, Aspen Accents, "which has affected that business and its employees."

The dark nights

Knight said he has taken care of his clients.

When closing the hotel, Knight said he personally took one guest to another business and paid for her stay.

About 50 reservations between late February and Memorial Day have been honored, he said.

"People in general who asked for their deposits have been paid," he said. "I think we've taken care of everybody."

Talks are ongoing with a capable manager and Knight said he expects an answer soon.

Knight also said he would consider running the hotel himself, but later backed off, saying, "I don't think that's in the cards."

The restaurant, last called Arthur's Grill, will reopen under its original name from 1991: The Dining Room and will serve basic American cuisine.

Happy days?

The buzz about The Pollard reopening is cheering other Red Lodge business owners.

Rob Ringer, general manager of Red Lodge Mountain, said the percentage of skiers who stay at the upscale Pollard may be pretty small, but having the choice is wonderful.

"If somebody wants to come to town and have a special weekend, that's where they stay," Ringer said. "I'm just thrilled he's going to get that back and running again."

The boom-then-bust tourism cycle will even out as the town grows, Ringer said, and everyone will have a more stable business.

"We're still the neighborhood ski hill," he said. "But I think over time that will change and probably will benefit the Pollard quite a bit."

Lee Tower, who manages vacation rentals and serves as president of the Red Lodge Lodging Association, said other motels, hotels and rentals helped pick up the slack from the empty hotel.

"There was quite awhile when no one was answering the phone," Tower said. "We are a tourist town and we bend over backwards to help people."

Updating the Pollard

A call Thursday to the Pollard caught a voice message saying the health club is open for a workout and mentioned the hotel's May 27 re-opening date.

During the shutdown, Knight has made another round of improvements, including converting the wood-burning fireplace to gas.

"We're fixing the plumbing, the fireplace, things not visible to the average guest, but they will make the hotel work better," he said.

The renovation price tag for the last 14 years isn't disclosed, but Knight said, "I spent more than I should."

Red Lodge is looking better, he said, which will benefit his property.

"More buildings have been spiffed up," Knight said. "We've got some good stores that will attract good people."

-----

To see more of the Billings Gazette, or to subscribe to the newspaper, go to http://www.billingsgazette.com.

Copyright (c) 2005, Billings Gazette, Mont.

Distributed by Knight Ridder/Tribune Business News. For information on republishing this content, contact us at (800) 661-2511 (U.S.), (213) 237-4914 (worldwide), fax (213) 237-6515, or e-mail [email protected].