|By Carol Gorga Williams, Asbury Park
Press, N.J.McClatchy-Tribune Regional News
Dec. 07, 2010--A Great Neck, N.Y., real estate investment and management firm has purchased the multimillion dollar mortgage for the Ocean Place Resort & Spa, which will be the subject of a sheriff's sale in January.
United Capital Corp. said it purchased the note from Barclay Capital Real Estate Inc. on Oct. 26, and said the mortgage has about $60 million in outstanding debt secured by the hotel, whose construction for many years was the lone symbol that the city's oceanfront redevelopment was possible.
Ocean Place is a 12-story, 254-room hotel on 16 oceanfront acres. It includes a 35,000-foot conference center, two restaurants, tennis courts and a full-service spa. Before the country's economic problems, Ocean Place Development had proposed a $500 million plan including construction of a second hotel tower, shops, a movie theater and bowling alley. Millions would have gone to the city for the reconstruction of the oceanfront pier.
When the economy tanked, Ocean Place ran into difficulty securing credit.
"It is a profitable hotel," said United Capital President Attilio F. Petrocelli. "How profitable is another question. Is it profitable enough to pay off the debt that is on it? That is another question."
Ocean Place's future could take several paths. Another company could outbid Petrocelli at the sheriff's sale, or the current owner could ask for a postponement.
"The owner of the hotel could pay us off," Petrocelli said. "We're hopeful he does, but if he doesn't, we would be very happy to operate the hotel. If we have to go to foreclosure, there would be no disruption to anyone. Our guests would never know there had been a change of ownership."
Petrocelli said he has taken a call or two from "petrified fathers of the bride" who became aware of Ocean Place Development's financial problems only after putting down sizable deposits to secure banquet rooms for upcoming wedding receptions.
"I know how they feel," Petrocelli said. "I was fortunate enough to be the father of two brides. There is no question their weddings will go forward just as planned."
Petrocelli, who already has contacted Mayor Adam Schneider, said he remains interested in redevelopment, potentially when the economy approves.
"We would certainly be inclined -- together with the city -- to come up with a redevelopment plan in the future," said Petrocelli, whose company owns or manages 150 properties in 38 states.
According to the company's website, United Capital has a "clearly defined strategy of investing in developed properties and businesses that provide quality products." Petrocelli said Ocean Place was attractive to United because of its "premier location" including direct beach access.
"They are looking at this as a prime asset in a great location," Schneider said. "Based on my conversation with him, he is absolutely planning on owning and operating it. He didn't flat out say that, but he left me with that impression."
Petrocelli said he and Schneider are of like minds when it comes to the resort's future.
"He certainly wants to see Long Branch developed into a destination location," said Petrocelli, adding that he has set aside some $12 million to fund capital improvements at the hotel on projects undertaken gradually and in the off-season to limit inconvenience to guests.
United Capital owns about 900 hotel rooms, more than 42,000 square feet of meeting space and a 132,000-square-foot convention center available from its four full- and limited-service hotels in Connecticut, Florida, Georgia and New York.
The full-service hotels operate under Doubletree and Radisson franchise agreements, and the limited-service hotel operates as an independent.
To see more of the Asbury Park Press or to subscribe to the newspaper, go to http://www.app.com/.
Copyright (c) 2010, Asbury Park Press, N.J.
Distributed by McClatchy-Tribune Information Services. For more information about the content services offered by McClatchy-Tribune Information Services (MCT), visit www.mctinfoservices.com.