|By Carol Hazard, Richmond Times-Dispatch,
Va.McClatchy-Tribune Regional News
July 20, 2011--The financially struggling Ramada Plaza Richmond West, the former Sheraton Richmond West and the once-upon-a-time Hyatt House, could be reinvented once again.
The loan for the Henrico County hotel is on the auction block and scheduled to be sold online during a bidding process from Aug. 15 to 18, according to Auction.com, an online auctioneer.
The unpaid balance on the loan is $29.5 million, according to the auctioneer. The property is assessed at $16.6 million. The starting bid is $1.7 million.
"We expect the bidding to be fierce," said Rick Weinberg, the auctioneer spokesman.
Banks typically review the highest bid and decide whether to take the deal, he said.
Weinberg said Auction.com closes on more than 80 percent of these problem properties.
The loan -- not the property itself -- is being auctioned and sold.
Despite the financial troubles, the hotel and the onsite University Bar and Grill restaurant are open.
The most common options for new note holders are to negotiate new terms with property owners or begin foreclosure proceedings to gain possession, Weinberg said.
Foreclosure proceedings on this property have not begun, according to Auction.com's latest information, which was submitted by the bank several weeks ago.
However, the loan is nonperforming, meaning payments have not been made for more than 90 days.
The general manager for the hotel could not be reached. A recorded message on his telephone number said the mailbox was no longer available.
A hotel representative referred calls to the Pyramid Hotel Group LLC, a hotel development, management and ownership company in Boston. Calls were not returned.
Built in 1974, the hotel -- off West Broad Street near Interstate 64 and across from Reynolds Crossing -- originally was the Hyatt House, a place to be and be seen.
"It's one heck of a nice location," said Stevens N. Gentil, chairman of Grubb & Ellis/Harrison & Bates, a commercial real estate firm based in Henrico. "It probably had too much debt on it."
Gary McLaren, executive director with the Henrico County Economic Development Authority, said the auction sale is not surprising.
"It was the premier hotel, but a lot of new hotels have gone up in recent times. It's an older property and had trouble [coming through] this recession," McLaren said.
"It was a matter of time before something had to give," McLaren said. "It's a great location near Genworth and Altria. My hope is that someone will reinvest and upgrade the hotel, so it will be competitive again."
The hotel in effect is in the backyard of Genworth Financial Inc., an insurance and financial services company, and across West Broad Street from Altria Group Inc., parent company of cigarette maker Philip Morris USA.
It's also across from the new Westin hotel in Reynolds Crossing, which has siphoned business from the Ramada, real estate experts say.
J. Sargeant Reynolds Jr., a principal with Reynolds Development, the company that developed Reynolds Crossing, said he and his partners are not sniffing around the Ramada property. "We're too busy trying to develop the rest of Reynolds Crossing."
The Westin has done well but it's not 100 percent occupied every night of the year, he said.
Buying the Ramada would be a great opportunity to reposition the property, Reynolds said, noting that the hotel wraps around in a maze.
"This is a really strong area -- a central place for people to meet."
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