Nov. 2, 2002 - A trio of large hotels near Reliant Stadium is falling into foreclosure as Houston's hotel business retreats. 
 

The three, the Radisson Astrodome Hotel, the Holiday Inn Astrodome and the Days Inn Astrodome, have been posted for foreclosure after the owners defaulted on a $28 million note.  The foreclosure by Lehman Bros., a New York investment firm, is not expected to interrupt operations of the hotels.  The hotel market around Reliant Stadium, near the intersection of South Main and Loop 610, is one of the city's weakest, according to PKF. The area doesn't have

Radisson Hotel Astrodome Convention Center 8686 Kirby Dr. Houston Texas

The average occupancy rate for hotels in the Reliant Stadium area is 58 percent, compared with the 65.1 percent rate PKF has projected for the year. The Houston average is down from 67.1 percent last year. 

Nationally and in Houston, the hotel business has been off since last year's terrorist attacks and the national economic slowdown. 

"The market in general is soft this year. Everybody is staying home," said hotel analyst John Keeling of PKF Consulting. 

Further declines in occupancy rates, as well as soft room rental rates, are anticipated in Houston for 2003. 

The three hotels facing foreclose have had difficulty boosting occupancy rates and raising room revenues for years, said Nick Massad, president of American Liberty Hospitality, which managed them from 1988 until 1993. 

"Those properties have always struggled," Massad said. 

The Astrodome hotels -- the 630-room Radisson at 8686 Kirby Drive, the 235-room Holiday Inn Astrodome at 8111 Kirby and the 129-room Days Inn Astrodome at 8500 Kirby -- represent a large block of rooms. 

Massad, former president of the Hotel and Motel Association of Greater Houston, said this foreclosure is an extreme case -- hotels with high debt levels in a weak spot in the market -- and is not an indicator of a meltdown of the local hotel business. 

"The hotel economy here in town is really healthy and strong. I think this is an oddity," Massad said. 

The foreclosure, scheduled to occur Tuesday, will turn the hotels over to the lender. 

"We represent Lehman, and we do intend to proceed with the foreclosure," said attorney Ann-Dee Bailey of the Gardere Wynne & Sewell law firm. 

The hotels are owned by various investment partnerships carrying variations of the name Astrodomain Hospitality. 

The Radisson Hotel Astrodome, which has a sizable amount of meeting space, was formerly known as the Sheraton Astrodome Hotel. 

That hotel had a $27 million interior renovation in 1991 and is in need of additional refurbishing, Massad said. 

The three hotels previously were owned by John McMullen, a former Houston Astros owner. 

McMullen sold the Astros to Drayton McLane in 1992. McMullen sold the hotels a year later. 

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