|By Rich Laden, The Gazette, Colorado
Springs, Colo.McClatchy-Tribune Regional News
July 21, 2011--Amid an ongoing economic malaise, John Q. Hammons Hotels & Resorts says it's abandoning completion of its 300-room Renaissance Hotel in Colorado Springs and will make way for new owners later this year.
It marks perhaps the first time in the more than 50-year history of Missouri hotel developer John Q. Hammons that one of his companies has walked away from a hotel on which it began construction.
The decision is the latest twist in the high-profile Springs project, where work was halted nearly two years ago. The elderly Hammons, meanwhile, entered a nursing home last year at the same time his business underwent a controversial management shake-up.
A 4th Judicial District Court judge last month ordered the 11-story hotel, east of Interstate 25 and InterQuest Parkway, be sold at a foreclosure sale Oct. 20 to satisfy a legal claim by the project's general contractor that it hadn't been paid, court documents show.
Flintco Inc., of Tulsa, Okla., filed a $24.6 million mechanic's lien last year against a limited liability company formed by Hammons, who no longer heads the Springfield, Mo.,-based hotel development firm that bears his name. The lien launched the legal process that resulted in a foreclosure action against the property.
With interest, the amount owed to Flintco was $29.4 million through April 30, court records show. Additional daily interest payments of nearly $4,600, which began May 1, would add $791,615 to the debt through Oct. 20, according to court documents.
In addition to 300 rooms, the Renaissance was to include 50,000 square feet of meeting and conference space. Its highly visible location off I-25, east of the Air Force Academy and part of the 138-acre InterQuest Marketplace retail center, made it an ideal location for leisure travelers and business groups, industry experts have said.
Construction started in April 2008 and stopped in October 2009. But Hammons, the 92-year-old hotelier who developed more than 200 projects around the country in a more than half-century career, told The Gazette in April 2010 he had spent $47 million of his own money and planned to resume work in May of that year on the project after obtaining additional financing.
But that never happened. News reports from Missouri newspapers and television stations said last year that Hammons -- a revered public figure in Springfield who donated millions to the community -- entered a nursing home, where he remains today. Several of his company's top managers were fired by a new CEO.
Justin Harris, senior vice president and general counsel for John Q. Hammons Hotels & Resorts, said the forthcoming foreclosure sale of the Renaissance is the result of an agreement his company reached with Flintco. The two have a good relationship and worked to resolve the matter, he said.
"The property will be marketed and sold at a foreclosure sale to bring in the proceeds that will pay Flintco on the project," Harris said.
The Hammons company, however, won't be among the bidders and won't finish the hotel's construction, Harris said. This will be the first time in recent memory, and possibly in its history, that the company will have abandoned a hotel where construction had started, Harris said. The hotel is about two-thirds to 70 percent complete, although it lacks major mechanical and electrical systems, furniture and fixtures, he said.
Despite Hammons' optimism in 2010, the financing "didn't work out," Harris said. With the economy still ailing, he said, "it makes more sense to dispose of it than it does to go ahead and complete the project ourselves.
"It's disappointing for us because it would have been a fabulous hotel," Harris said. "But at the same time, it's a good decision for us."
Harris said potential buyers are showing interest in the property, although he declined to identify them.
Whether Flintco would buy the property and re-sell it -- applying what it's owed toward the purchase -- is unknown. Dana Birkes, a company spokeswoman, said Flintco won't comment on its plans.
Given the hotel's condition, new owners could finish it in nine months to a year, Harris estimated. Based on how the Hammons company develops its properties, he said it would cost another $30 million to complete the project.
Contact the writer at 636-0228
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Copyright (c) 2011, The Gazette, Colorado Springs, Colo.
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