News for the Hospitality Executive
The Financially Troubled Sheraton Billings Hotel Attracting
Interest from Several Investor Groups
|By Tom Howard, Billings Gazette, Mont.
Knight Ridder/Tribune Business News
April 4, 2006 - Representatives of a Denver-based real estate company are in Billings this week to take a look at the financially troubled Sheraton Billings Hotel.
Alan Elliott, general manager of the Sheraton, wouldn't disclose the name of the potential buyers, saying only that the Sheraton has attracted interest from investor groups inside and outside Billings.
However, the Denver headquarters of J.R. Herzog & Sons Inc. confirmed that company representatives were in Billings. But company officials didn't immediately return phone calls from The Gazette.
Foreclosure proceedings began on the Sheraton in March 2005 after the
owners, Larken Inc. of Iowa and Nationwide Hospitality Limited Partnership
of Delaware, failed to make payments on a $24 million mortgage used to
finance the Sheraton, the Missoula Holiday Inn and hotels in Denver and
the Dallas/Fort Worth area. The lenders, LaSalle Bank National Association
and Nomura Asset Securities Corp., filed the foreclosure papers. District
Judge Susan Watters later appointed a Billings accountant as receiver.
Elliott, who has managed several Billings hotels over the past 20 years, works for Sage Hospitality Resources, a Denver company that was hired to operate the Sheraton in the wake of the foreclosure.
If a sale goes through, Elliott said, the hotel probably would undergo major improvements, much like the $8 million renovation being planned by the new owners of the Holiday Inn Grand Montana.
Meanwhile, Sage Hospitality Resources has been actively repairing mechanical problems that have plagued the Sheraton in recent months, Elliott said.
Business travelers continue to be the Sheraton's bread and butter, and Elliott expects that most current employees would remain if the hotel is sold.
Elliott said the Sheraton has been on the market for about 30 days. Hospitality Real Estate Counselors Inc. of Denver is marketing the property, he said.
Greg Krueger, executive director of the Downtown Billings Partnership, said downtown Billings would benefit if the Sheraton comes under new ownership.
"In general, the feeling in the partnership is that the Sheraton and the Northern Hotel are vital properties to downtown but they're underutilized," Krueger said. "You'd be missing the boat if you don't think that the Sheraton is one of the premier properties available."
The Northern Hotel has been experiencing its own financial troubles. A sheriff's foreclosure sale is scheduled for May 25 unless delinquent property taxes and lodging taxes are paid before then. The Northern's creditors have filed suit seeking repayment of debts.
The 23-story Sheraton was built in the 1970s. The hotel has changed hands several times and went through a foreclosure in 1987.
Herzog has been involved in real estate management for more than 30
years. Many of its properties are shopping centers, but two years ago the
company ventured into the hospitality industry by purchasing the Knoxville
Hilton in Knoxville, Tenn. The company also deals in mineral rights and
receives income from more than 1,350 oil wells in the United States and
abroad, according to the company's Web site.
To see more of the Billings Gazette, or to subscribe to the newspaper, go to http://www.billingsgazette.com.
Copyright (c) 2006, Billings Gazette, Mont.
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