|By Samantha Koon, The Daily Progress,
Charlottesville, Va.McClatchy-Tribune Regional News
June 14, 2012--Three bidders have qualified for the Landmark Hotel property's auction, which is scheduled to be held Monday morning in U.S. District Court.
Richard Maxwell, the attorney for current property owner and CNET co-founder Halsey Minor, filed a document Thursday listing Atlanta-based Deerfield Square Associates II, LLC; J.B. McKibbon, Ltd., which is associated with a hotel management group in Tampa, Fla.; and TRT Holdings, Inc., a private holding company based in Irving, Texas, that owns the Omni Hotels chain and Gold's Gym International, as qualifying bidders for the upcoming auction.
Interested parties were required to submit an opening bid of at least $3 million and a $200,000 cash deposit. Deerfield Square Associates submitted an opening bid of $3.5 million, while McKibbon and TRT Holdings submitted the minimum amount.
Losing bidders will have their deposits returned.
Two other parties submitted bids but were deemed unqualified, according to court documents filed Wednesday.
CRC Acquisitions LLC submitted a $1 million dollar bid, which was rejected because the amount is less than the required minimum.
Lee Danielson, the hotel's original developer, submitted a $3 million bid, but "did not include sufficient evidence of the financial ability ... to consummate purchase of the property," according to Wednesday's filing. Danielson, a California native, is responsible for such properties as the Charlottesville Ice Park and the Regal Cinema on the Downtown Mall. Minor fired him from the Landmark Hotel construction project in December 2008.
Arbitrator Donald H. Kent sided with Minor during a legal dispute between the two parties, saying that Danielson's company breached its development agreement with Minor Family Hotels by misrepresenting the construction project's budget and true costs. Minor was awarded $4.2 million in damages and $2.2 million to cover attorney fees in the dispute.
C. Connor Crook, who represented Danielson in the matter, could not be reached for comment on Danielson's bid submission.
The two nonconforming bidders may dispute their exclusion from the auction in writing. Today is the deadline to file such an objection.
Noticeably absent from the list of qualified bidders is Milwaukee-based businessman Timothy J. Dixon and his company, Virginia Hotel Fund LLC.
Dixon offered to buy the Landmark Hotel for $2.8 million earlier this year, promising to turn the property into a boutique hotel. Several other bidders expressed interest in the would-be 100-room, nine-story luxury hotel, and Judge William E. Anderson agreed to put the property up for auction.
"As of this moment -- and I don't see how this would change -- Mr. Dixon is not a qualified bidder," said Bill Shmidheiser, an attorney representing mechanics lien-holder R.D. Jones. He added that the terms of the auction state that only qualified bidders will be able to participate in Monday's in-court auction.
Construction on the property began in February 2008, but came to a halt later that year as a number of lawsuits erupted around the property. Minor Family Hotels filed for Chapter 11 bankruptcy in September 2010.
Sale proceeds will go towards paying off the more than $17 million in liens against the property. Charlottesville Circuit Court Judge H. Thomas Padrick ruled in December that the city of Charlottesville's $128,183 tax lien would be the first paid from sale proceeds, then general contractor Clancy & Theys Construction Co. would receive its more than $2 million mechanic's lien. Other debts, including Atlanta-based Specialty Financial Group's claim for more than $13 million, would follow.
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