|By Beverly Fortune, The Lexington
Herald-Leader, Ky.McClatchy-Tribune Regional News
June 28, 2011--The future of a landmark Lexington hotel remains uncertain after it was sold for $9 million at a master commissioner's sale Monday.
Crowne Plaza Lexington -- The Campbell House, at 1375 South Broadway, was in default on its $21 million mortgage. The property was purchased by the mortgage holder, JPMC 2006-CIBC14 South Broadway REO, LLC.
Circuit Judge Pamela Goodwine had awarded a judgment against the hotel's owners, Thoroughbred Campbell House LLC, on April 28 and ordered the property sold. She also appointed Chris Bryan, vice president of Hospitality Receiver LLC, to take over management of the hotel. Bryan hired Prism Hotels & Resorts, a hotel receivership and management company based in Dallas, to run the property on a day-to-day basis.
Attorney James Williamson said his client will weigh its options during the next few weeks before deciding what to do with the property, which had been valued at $9.25 million by the Fayette County property valuation administrator for the purpose of determining property taxes.
Master Commissioner James Frazier III had set a minimum bid of $8.1 million before the sale started at the Fayette Circuit Court building. The deal becomes final July 7.
In the meantime, the hotel will remain open, said Scott Mattmiller, attorney for majority owner Joe Montgomery.
"We anticipated that the lender was going to purchase the property," he said. "My client has been in discussion with the lender, and continues to be in discussion with them, in an effort to repurchase the property."
Williamson said his client had hoped a third party would buy the property and pay off the debt.
He acknowledged the $12 million gap between the hotel's mortgage and Monday's sale price, saying such gaps are common "because of the devaluing of property over the last five or six years."
"These loans now seem exceedingly high when you do a current appraisal," he said. "Unfortunately, that is part of the risk of owning and borrowing and loaning money on real estate ... the value does fluctuate over time."
After Monday's sale, Frazier said he was "not that surprised" at the outcome of the auction.
"Banks bought everything back today," he said, referring to more than a dozen other properties that were sold at the auction.
The Campbell House was built in 1951 by Ralph Campbell. It has been enlarged over the years and now has about 290 rooms and 26 suites in its main building, a swimming pool and a dining room.
After a $10 million renovation in 2004, the name of the hotel was changed to include Crowne Plaza Lexington.
Reach Beverly Fortune at (859) 231-3251 or 1-800-950-6397, Ext. 3251
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