Jul. 13--URBANA, Ill.--Jumer's Castle Lodge, Urbana, has been sold to a Clinton, Mo.-based hotel operator. 

In a transaction approved recently by the U.S. Bankruptcy Court, Peoria-based Jumer's Castle Lodge Inc. turned over the Urbana hotel at 209 S. Broadway Ave. to Marine Bank of Springfield on July 5. 

The bank, in turn, sold the property to Rajni Bhagat for $2.7 million, Bhagat said. 

Jumer's President and Chief Executive Officer Frank Pedulla said Marine Bank was the lien holder for a $1.9 million mortgage the company took out for improvements at the Urbana hotel. 

Pedulla also said Jumer's, which filed for Chapter 11 bankruptcy protection in 1999, remains the owner and operator of its hotels in Bloomington, Peoria, and Galesburg in Illinois and Betterndorf, Iowa. 

Pedulla said the court order and sale "ensures the continuing presence of the Castle Lodge in the Urbana community," and gives Bhagat time to solidify his plans for the hotel before the University of Illinois fall semester begins. 

As part of the sales agreement, Pedulla said, Bhagat can use the Jumer's name and central reservation system for up to one year. 

Bhagat said he is now the majority shareholder in the Urbana Jumer's, and two of his uncles, T.R. Patel of Tennessee and B.J. Zala of California, own minority shares. 

Bhagat said he plans to relocate to Champaign-Urbana as soon as he finds a home in the community. He also plans to move the corporate office of his hotel business from Missouri to Champaign-Urbana, he said. 

Bhagat said he plans to maintain Jumer's as a hotel and restaurant, and will take his time making any changes. 

"It cannot be changed overnight," he said. 

Bhagat said he plans to continue using the Jumer's name for a year, but will be soliciting suggestions from guests and the community to rename the property. 

Bhagat also said he plans to install electronic security locks and do some general maintenance work at the hotel the first year, but won't begin any remodeling until the following year. 

That will give him time to seek input from the community about whether the antique character of Jumer's still best suits the property, or whether bigger changes are needed, he said. 

"I cannot upgrade this hotel myself," he said. "I'd like to have the support of my staff and the community." 

Bhagat, 38, is a native of India who came to the United States in 1986. While still in India, he received a degree in economics and management. 

Bhagat said he came to the United States for the opportunities it offered. He said he arrived in California without a cent in his pocket, learned English, and worked a variety of jobs -- among them cleaning hotel rooms. 

He started buying hotels in 1995, and now owns several, either alone or in partnerships, in California, Missouri and Oregon, he said. 

Bhagat said he was attracted to the Urbana Jumer's, his first hotel in Illinois, because of the challenge it offered. 

The UI was another draw for him, he said, because his children, ages 9 and 10, will eventually be going to college. 

At least initially, Bhagat said, he plans to offer a discount on reservations made by local community residents. 

Jumer's has about 130 guest rooms and a staff of 74. Formerly the Urbana Lincoln Hotel, it was purchased by Jumer's in 1977. 

James Webster, the majority owner of the adjoining Lincoln Square Mall, said he sees the change in Jumer's ownership as a positive for the mall. 

Webster said he's seen opportunities for joint marketing between the mall and hotel, but was never able to carry them out with the hotel's former owners. 

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(c) 2001, The News-Gazette, Champaign-Urbana, Ill. Distributed by Knight Ridder/Tribune Business News.