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The 193-room Avalon Hotel (formerly the Erie Hilton)
 Sells for $1.8 million

By Ed Palattella, Erie Times-News, Pa.McClatchy-Tribune Regional News

September 24, 2010 - --The financially troubled Avalon Hotel has a new owner, less than four years after another out-of-town entrepreneur bought the 193-room downtown Erie complex and promised to turn it into a Holiday Inn.

The new owner is Errie LLC, of Millburn, N.J., which purchased the Avalon for $1.8 million on Sept. 14, according to a deed filed at the Erie County Courthouse this week.

The previous owner, Mantiff Erie Hospitality LLC, based in Wayne, N.J., paid $4.73 million for the Avalon on Oct. 30, 2006.

The sale to Errie came with the Avalon having overdue property taxes of $148,937 and liens for unpaid sales and other taxes totaling $35,876.

Errie incorporated in Pennsylvania on Aug. 2, according to corporation records filed with the Pennsylvania Department of State. The records list one of Errie's organizers as Jignesh S. Doshi, of Millburn, N.J. He did not respond to a telephone message seeking comment.

Errie will have no comment on its plans for the Avalon until later, said the hotel's general manager, Stefanie Wilkinson, who worked under the previous ownership.

"Business is running as usual," Wilkinson said.

The sale of the Avalon coincides with the New Jersey-based Mantiff Management Inc., the umbrella company for Mantiff Erie, facing financial problems nationwide. Mantiff Altoona Hospitality LLC, which bought a 139-room Days Inn in Altoona in 2005, filed for Chapter 11 bankruptcy protection on Aug. 10.

Mantiff Altoona Hospitality listed assets of $274,000 and liabilities of $2.2 million as of Sept. 16, according to court records.

Mantiff Management and its founder and owner, Falgun Dharia, have also run into problems in North Carolina, where Mantiff 1215 Statesville Hospitality LLC had owned and operated a Holiday Inn in Statesville, southwest of Winston-Salem.

Mantiff lost control of the hotel in February, when a federal judge gave possession of it to the Telesis Community Credit Union, of California, which sued to foreclose on the property in October. The credit union claimed Dharia, Mantiff and others defaulted on a $5.1 million loan.

The judge on Sept. 1 approved a foreclosure sale of the property at a later date, according to court records.

Dharia could not be reached for comment. Mantiff Management's telephone number is no longer operable.

When Dharia purchased the Avalon in 2006, he said he owned and operated 10 hotels in Ohio, North Carolina and New York, according to previous reports in the IndUS Business Journal, which covers South Asian businesses in North America.

The Journal said Dharia's Mantiff Management expanded into owning hotels and franchise restaurants about five years ago.

Dharia, an engineer and computer scientist who came to the United States in 1987, worked at Bell Labs and started his financial empire with one convenience store in Hoboken, N.J., the Journal said. It said Dharia left Bell Labs in 1995 to concentrate on the stores and went on to own 45 Dunkin' Donuts franchises, which he sold to focus on hotels and restaurants around 2005.

When his company purchased the Avalon, Dharia said, he planned to spend $3 million on renovations and transform the hotel -- which was once a Hilton -- into a Holiday Inn.

Dharia said the affiliation would occur between November 2007 and February 2008. It never happened.

Mantiff Erie took out a $4 million mortgage on the Avalon when it bought the property in 2006. That mortgage remains unsatisfied, according to court records.

Mantiff bought the Avalon just as the Sheraton Erie Bayfront Hotel was taking shape as part of the $100 million-plus Bayfront Convention Center complex.

The publicly funded project, which opened three years ago, drew criticism from some local hoteliers who unsuccessfully sued to block the county's 5 percent hotel room tax, which went into effect in 2001. The hoteliers said the tax was unfairly subsidizing the Sheraton, their competitor.

Dharia took a different approach. He said in 2006 that he became interested in buying a hotel in Erie after learning about the Sheraton and the rest of the Bayfront Convention Center complex.

"I think that will give us the corporate business and convention business also, " Dharia said after he bought the Avalon.

ED PALATTELLA can be reached at 870-1813 or by e-mail.

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To see more of the Erie Times-News, or to subscribe to the newspaper, go to http://www.GoErie.com.

Copyright (c) 2010, Erie Times-News, Pa.

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