|By Dan Wallach, The Beaumont Enterprise, Texas|
Knight Ridder/Tribune Business News
Oct. 1, 2004 - The old Beaumont Hilton, renamed MCM Elegante, will receive between $7 million and $10 million in renovations that should be completed by March 1, said new owner John Bushman, an Odessa investor.
In an interview Thursday with The Enterprise, Bushman said by telephone that he and his investment group, ICA Properties, acquired the former Hilton from a New York-based holding company, Lehman Brothers Holdings Inc.
Bushman said the property had been in foreclosure for the past three years.
He declined to divulge its acquisition price.
The Jefferson County Appraisal District in 2004 assigned a market value of $5.2 million to the property at 2355 Interstate 10.
Bushman said he plans a major renovation of the hotel, which led the way toward development of the western side of Beaumont in the early 1980s. At the time, City Council declared the area "blighted" for tax purposes to provide incentive for development.
The lodging industry, like much of the tourism-related industry, has suffered from depressed receipts in the three years since the terror attacks of Sept. 11, 2001.
Bushman said hotel property owners generally schedule improvement programs to keep up with their flagship hotelier's standards.
The former Hilton's most recent improvements were to occur in late 2001, he said, but the owner balked on making them.
"It went from $1 million in late 2001 to $4 million or $5 million now" because its condition deteriorated, Bushman said of the renovation's cost.
"It left an opportunity for us to make something good out of it," he said.
He severed the hotel's relationship with Hilton.
Bushman said he would be able to finance the improvements through savings that otherwise would have gone to the Hilton Hotels Corp. to pay fees associated with franchising and marketing.
"Now we can pay for the renovations through the life of the improvements -- generally five or six years," he said.
He envisions equipping the 285 guestrooms with mahogany poster beds and 13-inch thick mattresses, other new furnishings and high-speed Internet access.
He also plans to upgrade the public areas. Beginning today, the hotel will feature a sample guestroom in its lobby.
Bushman said he expects some losses during the next five or six months while the renovations are under way.
Once done, he expects to charge an average of $75 per room night. He also expects occupancy to increase to about 70 percent.
The lodging industry in and around Beaumont has bounced between 60 percent and 65 percent occupancy, the Beaumont Convention and Visitors Bureau reported recently.
Bushman said he prefers investing in hotel properties in second-tier cities such as Beaumont and Odessa.
He used the "Elegante" name for a hotel property in Odessa.
The "MCM" comes from a property he also owns in Odessa called Music City Mall.
He said the MCM name evokes MGM, which was part of a famous hotel name in Las Vegas.
The Elegante's general manager is Bill Bianchi, formerly general manager of the Holiday Inn-Midtown on 11th Street.
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