News for the Hospitality Executive
|By Kimball Payne, Daily Press, Newport News, Va.
Knight Ridder/Tribune Business News
May 31, 2003 - HAMPTON, Va.--A private lender to the Chamberlin Hotel's owner is foreclosing on the historic Hampton Roads landmark.
Barring an agreement or monetary windfall, the eight-story building on Fort Monroe will be sold at a public auction in three weeks.
The lender didn't want to be identified and refused to comment, but its lawyer said it had not been an easy decision.
"They would prefer to avoid the foreclosure proceedings," said Duffy Myrtetus, hired from law firm Kaufman & Canoles to represent the lender. "They are proceeding reluctantly."
The property was almost put up for auction in late January, but those plans were canceled just before announcement of the foreclosure.
The current owner -- Orlando, Fla.-based Pelican Properties -- didn't return telephone calls Friday.
Army officials said they did not know the details of the foreclosure and planned to monitor closely the sale of the building, which sits on military property.
"We do have a clause in the ground lease that states that we, the Army, have to approve the transfer of ownership," said Dillard Horton, chief of real estate for the Norfolk district of the Army Corps of Engineers. "It would be very embarrassing to the Army to have the wrong parties move in there."
The building -- a hotel for 74 years -- was bought in 1998 by Pelican Properties for $5.35 million. Plans for turning the landmark into a four- or five-star hotel quickly went sour. The hotel began struggling after the Sept. 11, 2001, terrorist attacks. The owners have said they were blamed for the security restrictions that choked access to the hotel on the Army post.
Further troubles developed this spring, when owners said a broken boiler caused a temporary shutdown.
The April closing forced the hotel to cancel a number of wedding receptions at the last minute.
Vowing to reopen in late June or early July, Pelican Properties closed the hotel temporarily in late April.
Looking to explore options, owners put the property up for sale in early May with local Realtor Tom Waltz of Drucker & Falk LLC.
The foreclosure auction will take place on the steps of the Hampton Circuit Courthouse at 11 a.m. June 20.
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(c) 2003, Daily Press, Newport News, Va. Distributed by Knight Ridder/Tribune Business News.