|By Mark Belko, Pittsburgh
Post-GazetteMcClatchy-Tribune Regional News
Oct. 13, 2010--The Tampa cardiologist seeking to take over the former Hilton Downtown has a message for the people of Pittsburgh and would-be guests at the hotel.
"Give me a chance and I'll show you what can be done," Kiran C. Patel said Tuesday.
Dr. Patel is looking to take over the city's largest hotel, one plagued by financial woes and unfinished construction for the last two years, as part of a plan of reorganization filed in U.S. Bankruptcy Court in Pittsburgh.
Under his proposal, the former Hilton, with more than 700 rooms, would be rebranded as a Wyndham Grand, the luxury brand under Wyndham Hotels & Resorts, and the claims of allowed creditors would be repaid in full over several years.
The hotel ended up in bankruptcy after New York-based lender BlackRock Financial Management Inc. moved to foreclose against owner Shubh Hotels Pittsburgh LLC.
Shubh defaulted on its $49.6 million mortgage with BlackRock when Hilton Hotels & Resorts terminated its franchise license agreement, leaving the prominent hotel without a flag.
Since then, Shubh has transferred all equity ownership in the hotel to Dr. Patel, according to James Gassenheimer, Dr. Patel's attorney. Shubh still remains the owner of the physical assets, he said.
In an interview, Dr. Patel indicated that he was a reluctant owner, saying his main interest was in protecting the $3.7 million in loans he made to Shubh and its principal Atul Bisaria over the last few years to help keep the hotel afloat.
"I didn't expect to go into ownership," he said after listening to testimony in bankruptcy court.
He added, "The circumstances are that I am involved and I have to try to protect the asset."
Dr. Patel said his main goal is get the hotel out of bankruptcy and "then focus on rehabilitating it and making it a success." One key order of business, he said, will be finishing an exterior addition, whose steel superstructure has been an eyesore at the entrance to the Golden Triangle for nearly 18 months.
Construction stopped in May 2009 when contractor P.J. Dick walked off the job after not being paid for its work.
Dr. Patel described his reorganization plan as a "win-win for all" because it would pay in full all contractors and vendors with allowable claims. He has agreed to post $8 million in letters of credit to pay off contractors, vendors and others if hotel revenues aren't sufficient to do so and also has offered to provide a $4 million completion bond to ensure the exterior addition is done.
"I believe I'm the one that can make a turnaround," he said.
Dr. Patel said he has built two $1 billion companies in the last decade and would have no problem owning the former Hilton. One company was an HMO he sold for $200 million. He and his family also operate more than 20 smaller hotels.
If BlackRock succeeds in getting approval to move forward with the foreclosure, which was stayed when Shubh filed for Chapter 11 bankruptcy protection, Dr. Patel and contractors and vendors could end up losing the money they are owed.
He added he thinks he should be given a chance because he's willing to assume loan payments to BlackRock as part of his ownership.
In court papers and in testimony, BlackRock lawyers have described Dr. Patel as an "insider" with those responsible for the hotel's plight, including Mr. Bisaria and Jai Llawani, the CEO of Black Diamond Hospitality who has been involved in hotel operations.
Although Dr. Patel is listed on Black Diamond's website as its chairman of the board, he said Tuesday he is not. He also denied being a partner with Mr. Llawani in a 2009 effort to buy the hotel or in another of Mr. Llawani's businesses, Fuel Group International.
He said Mr. Llawani is "an individual I know through the community and his family." David Martin, chief operating officer for Prism Hotels & Resorts, which now manages the hotel, testified Tuesday that Mr. Llawani no longer is permitted on the property, describing him as "disruptive."
Mr. Bisaria, Dr. Patel said, was another he knew "indirectly" in Tampa through the Indian community. The cardiologist said he tried to help Mr. Bisaria when the hotel ran into trouble.
"I believed it was a good asset," he said. "I didn't believe it would head in this direction."
Mark Belko: email@example.com or 412-263-1262.
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