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Richfield Hospitality Working to Get the Situation at Decatur's Largest Hotel with
 370 rooms and 50,000 sq ft Under Control; Holiday Inn Select Franchise Pulled


By Chris Lusvardi, Herald & Review, Decatur, Ill.McClatchy-Tribune Business News

Jan. 21, 2007 - DECATUR -- Chuck and Sandi Smith of Decatur have spent New Year's Eve with family and friends at the Decatur Conference Center and Hotel for more than a decade.

The group, which has grown to include almost 100 people, chose the center because of everything it offers, including its suites, restaurants and pool. The Smiths want to see the tradition continue and would be hard-pressed to find another location that could house the large group.

"We would probably be hurting with so many of us there because I don't know of any other place that offers the accommodations," Chuck Smith said. "I think it would be a big loss to Decatur not to have that there."

Since it opened in the mid-1970s, thousands of people like the Smiths have visited the center for its entertainment, special events and lodging.

However, for the past several years, an ownership dispute and failing finances put the future of the hotel into question. For much of 2006, employee morale was drained, and nobody knew how long it would stay open.

But now business is starting to bounce back, and management is making the final push to have much of the uncertainty settled. Under the current conditions, the hotel appears set to remain open.

A new general manager has been working since September to get the situation under control and bring new life to the area's largest conference center and hotel, with 370 rooms and more than 50,000 square feet of convention space. At the same time, the center's owners are working to meet their financial obligations.

Scott Hall of Denver-based Richfield Hospitality Services was hired to manage the hotel. He had previous experience running hotels in places such as Pittsburgh, Salt Lake City and Baltimore.

When he arrived in Decatur, Hall said morale was at an all-time low.

"It was pretty demoralizing when I got here in September," Hall said. "Every hotel has its challenges. Here it was the uncertainties that evolved with this property and what was going on with the ownership group."

Richfield had previously managed the property, formerly known as the Holiday Inn Select Hotel and Conference Center but was let go after owners John Cardwell and James Randall split their business partnership about three years ago, said Stephen Willoughby, a Decatur attorney representing Randall.

At the time of the split, plans were in place to build a water park on the property, with Cardwell's company, Real Estate Investors of Decatur LLC, managing the hotel. Although the water park was never built, Cardwell's company was left managing the hotel.

Willoughby said payments soon were not being made to vendors, the bank and others. Some vendors refused to make deliveries without being paid in advance, Willoughby said.

The Holiday Inn Select franchise was pulled in late 2005, but the sign in front of the hotel didn't change.

"Even though they didn't change the sign, the uncertainty began to build," Hall said. "In a community of this size, it's big news."

Central Illinois Bank was owed money on loans and finally decided it had enough. It was owed more than $12.6 million on a mortgage and $37,218.21 of a second $500,000 mortgage, according to a lawsuit filed in June when the bank threatened foreclosure action against the center.

Cardwell countered by filing for voluntary bankruptcy protection, which his lawyers subsequently asked to have withdrawn. The request was approved in October, said John Barr, a Decatur attorney representing Cardwell.

In September, Randall, the former president of Archer Daniels Midland Co., stepped back in, and his company, Decatur Hospitality Services LLC, assumed ownership of the property, preventing it from being lost to the city of Decatur, Willoughby said.

Central Illinois Bank is still owed money, and lawyers for all sides are working to meet their obligations under the terms of the agreement to transfer the property to Randall.

The hotel "is turning around, but I don't think it's removed the sour taste in their mouth, yet," Willoughby said of the bank. "They want to get paid. Both sides are working to try to have some positive things occur."

Joseph Chamley, a Champaign attorney representing the bank, said his client wants to keep the hotel open and is working with management to keep it from closing.

"My client, Central Illinois Bank, absolutely has that interest," Chamley said. "That hotel will not go dark."

Under Hall's leadership, management is keeping a budget and forecasting its anticipated business volume, which Hall said are normal practices that weren't happening when he arrived. Vendors are being paid on time, Hall said.

"We're on the best financial footing from an operations standpoint that the hotel's been on in probably years," Hall said.

He is working to revive the hotel without changing its staff. Only a handful of employees have left. Hall is hoping to add to the approximately 130-member staff in the coming weeks, including to its sales staff.

"We're not going to sit back and just rest," Hall said. "We're going to drive business into the hotel."

Business started to pick back up in the last part of 2006 as more reservations are being made, said Tina Perryman, the hotel's revenue manager.

Hall has refocused the staff and given it a new perspective when it comes to customer service, Perryman said.

"We didn't know when we could push a little bit further to get the job done," said Perryman, who has worked at the hotel 15 years. "We thought we needed the OK, but he's said to go with your gut."

The Nov. 30 ice storm brought a spike in business in December, which is normally a slow period. The center hosted the Cardinals Caravan, a bridal show and a Martin Luther King Jr. Day dinner last weekend and is scheduled to host more events, such as a February jazz festival, in the coming months.

Denene Wilmeth, the Decatur Area Convention and Visitors Bureau executive director, said the center is too important to the Decatur economy to lose, saying it's one of the largest of its kind in the state outside of Chicago.

"It brings in hundreds of thousands of dollars worth of business to the community every year," Wilmeth said. "It's our major source of convention space. So obviously it's high on our list of priorities."

Perryman said the staff has been through a lot in the past year, but she wasn't worried about the hotel closing.

"It's always going to be a highlight of Decatur," Perryman said. "It's not going to go away. We've got too much here to offer."

Chris Lusvardi can be reached at clusvardi@herald-review.com or 421-7972.

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Copyright (c) 2007, Herald & Review, Decatur, Ill.

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