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Detroit's 413 room Hotel Pontchartrain
 Will be Sold at Auction
Hotel Has Struggled for Years in a Weak Downtown Hotel Market
By John Gallagher, Detroit Free Press
Knight Ridder/Tribune Business News

Feb. 12, 2005 - Detroit's Hotel Pontchartrain, a downtown landmark that has long suffered slack sales in a weak hotel market, will be sold at auction in early March.

The 413-room hotel will be auctioned March 8 by a national asset disposition firm called Tranzon. Details of the bid process can be found on the firm's Web site at

Terms of the auction require that the closing of the sale must take place within 15 days. The hotel is being sold as is. It's unclear what will happen if the hotel does not sell at the auction.

Michael O'Callaghan, executive vice president and chief operating officer of the Detroit Metro Convention and Visitors Bureau, said the hotel's owner for several years has been Highgate Holdings, a Dallas-based investment firm, but that Highgate's bankers recently took back the property to sell it at auction.

Built in 1965, the Pontch, as it has been known since its opening, was downtown's first major hotel built since the 1920s. A landmark with its faceted façade that gives each room views of the Detroit River, the hotel has struggled for years in a weak downtown hotel market.

Industry experts have often said the downtown market typically averages about 50-percent occupancy, whereas occupancy levels in the 60- to 70-percent range are necessary for profitability.

In recent years, Highgate tried to sell the property for a price reported to be in the $9-million to $10-million range. Industry observers say the auction price might end up in the $5-million range.

The hotel needs a complete refit of its systems and decor, O'Callaghan said. Yet it remains vital in a market that will host Super Bowl XL next February as well as the annual North American International Auto Show and other premier events.

"It would be a great thing if somebody could come in and renovate it," O'Callaghan said Friday.

Detroit's convention planners say the Pontchartrain is especially important given its prime location just across the street from Cobo Center.

With a renovation and expansion of Cobo in the planning and negotiating stage, a renovated Pontchartrain could play a key role in attracting new conventions and trade shows to Detroit.

Among other details, the hotel features 25 stories and about 308,000 square feet. It also has 13 meeting rooms with a total of about 13,500 square feet of space; and a parking garage with about 170 spaces.

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