|By Dale Quinn, The Arizona Daily Star,
TucsonMcClatchy-Tribune Regional News
Aug. 26, 2011--The company that owns Hotel Penasco del Sol in Rocky Point filed for bankruptcy protection this week after one of its creditors moved to take over the property.
It's the latest holding of Michael Hanson -- whose cash-strapped Tucson properties include the Westin La Paloma Resort & Spa and the Doubletree Hotel Tucson at Reid Park -- to seek Chapter 11, or reorganization, bankruptcy protection.
NCH Rocky Point LLC, which owns the beachfront hotel in the Sonora town formally called Puerto Penasco, filed its voluntary petition Monday.
Secured creditor Textron Financial Corp., which NCH Rocky Point owes $13.5 million, had made a move to take over the property either through a trustee sale or by appointing a receiver, said Eric Slocum Sparks, NCH Rocky Point's bankruptcy attorney.
Sparks said Textron holds a lien on three parcels of property owned by Hanson's company: the 203-room hotel, 18 acres adjacent to it that was to be developed into a convention center and another 21 acres on the beach a short distance from the hotel.
Other creditors include investors, who are owed another $9.4 million, and Hanson's own management company, NCH Corp., which hasn't collected any fees for operating the hotel. NCH Corp. is owed $9.1 million, Sparks said.
Hanson acquired the hotel in 2004 and the owners recently poured in more than $2 million to remodel it with the intention of attracting more visitors, Sparks said.
That vision didn't pan out.
Drug violence in Mexico and travel warnings from the U.S. State Department that mentioned Puerto Penasco specifically have put a dent in the town's tourism industry.
"We're getting bad publicity and it's really impacted the number of tourists staying at the hotel," Sparks said.
Through the bankruptcy process, Sparks plans to reduce the hotel's debt to current market value and rewrite the mortgage.
Several companies tied to Hanson's Transwest Partners/NCH Corp. have filed for bankruptcy protection in recent months.
Hanson built a massive real estate portfolio -- which includes hotels, shopping centers and apartment buildings across Tucson -- around 2007 as property values peaked.
Financial pressure mounted with the onset of the recession as leisure travel slowed, property values plunged and consumers slowed spending.
Hanson's company that owns the Doubletree Hotel Tucson at Reid Park, on North Alvernon Way near East Broadway, filed for bankruptcy in May not long after receiving a foreclosure notice.
Another Hanson company, Gallery Row Limited Partnership, which owns the upscale Gallery Row shopping center on East Skyline Drive near North Campbell Avenue, also filed for Chapter 11 bankruptcy protection late in May after receiving a foreclosure notice.
The Transwest company that owns The Westin La Paloma Resort & Spa, 3800 E. Sunrise Drive, filed for bankruptcy protection last November, as it struggled to make mortgage payments on the Tucson resort and another property, the Westin Hilton Head in South Carolina.
Contact reporter Dale Quinn at email@example.com or 573-4197.
(c)2011 The Arizona Daily Star (Tucson, Ariz.)
Visit The Arizona Daily Star (Tucson, Ariz.) at www.azstarnet.com
Distributed by MCT Information Services