|By David Cox, The Paducah Sun,
Ky.McClatchy-Tribune Regional News
Jul. 23, 2009--The city of Paducah waged a long and valiant battle to save the Executive Inn.
The effort was not successful.
It's time to move on. Or should be. But now there are reports that the city, instead of accepting the fate the dormant hotel, is considering buying it from Logan Asset Managed Fund, the mortgage holder, with intentions to market it to another developer. We think that would be a mistake.
To make such a transaction happen, Logan would have to buy out buyer Bhupinder Singh's interest in the hotel. However that deal is far from reality, according to city Commissioner Gerald Watkins, because Singh wants more than Logan is willing to pay. No surprise there. In two years of dealing with Singh, he has made one thing abundantly clear: Whatever he is offered, he always wants a little more.
Singh bought the hotel for $5.7 million in 2007 and owes $4 million on the mortgage. The loan is in default since he has not made a payment since 2008. Not only that, but contractors who performed repairs and renovation this spring to get the hotel ready for the annual quilt show have filed liens seeking payment. Liens and other debts total more than $600,000.
Even if the city can negotiate to buy the mortgage from Logan for less than the amount owed, it would still face the other liabilities and in the end almost certainly pay more than the hotel is worth.
The Paducah-McCracken County Convention Center Corp. board has filed suit seeking title to the hotel based on two facts: it owns the land the dormant hotel sits on, and the owner is in breach of its contract to operate the Julian Carroll Convention Center and Expo Center next door, since the hotel closed. Logan Asset Management Fund has filed its own claim in that lawsuit, seeking payment of the amount outstanding on its mortgage.
Resolving the legal issues could take two years. Mayor Paxton said in an interview earlier this week that is too long to wait. "We need to move as quickly as we can to get a good quality hotel operating downtown," he said.
We agree. But we think that could best be accomplished by moving in a different direction.
The only legitimate reason the city has for buying the Executive Inn is to tear it down. And then only if the city can get it for a rock-bottom price -- which is to say, the city should not pay more than it's worth. That probably means buying it at auction on the courthouse steps, an event not likely to occur until all the legal battles have run their course.
But nothing is keeping the city from pursuing another, smaller downtown hotel in another location. The sooner the better.
A new hotel could conceivably be built and opened before the Executive Inn emerges from court. And the incentives the city might provide for a new hotel would likely be a far better long-term investment than buying the empty shell of the Big E and praying a viable developer will miraculously materialize.
The new hotel could be built near the convention centers, but on the dry side of the floodwall, or in another downtown location.
The public mood, as we read it, is tilted against further investment of public funds in the Executive Inn. We think the public is ready to bury the old hotel, and they won't stand for the city trying to buy it.
City Hall should get on with plans for riverfront development, complete with a new hotel, without the Big E in the picture. The Phoenix won't rise from these ashes one more time.
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Copyright (c) 2009, The Paducah Sun, Ky.
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