|By Dale Quinn, The Arizona Daily Star,
TucsonMcClatchy-Tribune Regional News
May 27, 2011--The Doubletree Hotel Tucson at Reid Park, a popular venue for community events that was recently scheduled for foreclosure auction, has now filed for bankruptcy protection.
Reid Park Properties LLC, the company that owns the property, filed Thursday for Chapter 11, or reorganization, bankruptcy. The filing generally protects a business from legal action, such as a foreclosure sale, while it restructures its debt.
The company has $52 million in liabilities and $14 million in assets, according to its bankruptcy petition.
The hotel at 445 S. Alvernon Way is delinquent on about $31 million in loans, a foreclosure notice filed March 30 in the Pima County Recorder's Office says. That notice said an auction on the property had been scheduled for July 7 at 11:30 a.m. at the County Courthouse, 110 W. Congress St.
The hotel was poised to be taken over by a receiver, which would have handled daily operations, but the Chapter 11 filing will allow Reid Park Properties to continue managing it, said Eric Slocum Sparks, the hotel owner's bankruptcy attorney.
The Doubletree still has banquets and other events scheduled, and those will continue to take place regardless of the bankruptcy, Sparks said.
Reid Park Properties -- an affiliate of Transwest Partners/NCH Corp. -- wasn't able to reach a repayment plan with its loan servicer, LNR Partners LLC.
Sparks said he will ask the bankruptcy court to lower the debt on the hotel to its market value, but he expects resistance from the creditors on that front.
He will also file a motion to use revenue from the hotel to continue operations there.
Transwest Properties owns other financially distressed properties in Tucson, including the Westin La Paloma Resort and Spa, 3800 E. Sunrise Drive.
The Transwest company that owns that Tucson resort filed for bankruptcy protection last November, as it had struggled to make mortgage payments on it and another property, the Westin Hilton Head in South Carolina. Transwest acquired those properties in 2007.
Arizona Corporation Commission documents show Michael J. Hanson and Randal G. Dix as managers of Transwest Partners LLC. Hanson and his wife, Christine D. Hanson, personally filed for Chapter 11 bankruptcy protection in February, listing between $1 million and $10 million in liabilities and between $100,000 and $500,000 in assets.
Hanson's financial troubles stem largely from acquiring properties when values peaked. He bought on the upswing, just before housing values crashed and room rates for resorts and hotels began to fall.
On top of that, leisure travel slowed as consumers tightened their wallets and convention business dried up.
Another Hanson property, Gallery Row, a shopping center in the Catalina Foothills near East Skyline Drive and North Campbell Avenue, recently received a foreclosure notice. In that situation, Gallery Row LP defaulted on a $5.9 million loan recorded in September 2006.
With the Doubletree Reid Park, documents again show that Hanson financed the property when the market was peaking. Reid Park Properties purchased the property in March 2007, according to an affidavit filed with the County Recorder's Office.
Still, such properties will prove profitable in time, Sparks said, and Hanson doesn't want them to go back to the lenders.
"You don't want to lose these properties," Sparks said. "The idea is to reorganize them."
Did you know
The Doubletree Inn at 445 S. Alvernon Way opened in 1974. Its location was chosen because of its proximity to El Con Mall and the Randolph Park (now called Reid Park) recreational facilities.
SOURCE: Star archives
Contact reporter Dale Quinn at firstname.lastname@example.org or 573-4197.
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