|By Julie M. McKinnon, The Blade, Toledo, Ohio|
Knight Ridder/Tribune Business News
Jun. 22, 2005 - A financial cloud again has been cast over a downtown Toledo hotel next to the convention center.
A Chicago bank has asked to foreclose on the Hotel Seagate because of unpaid bills, and it is negotiating with several unnamed buyers for the 35-year-old property next to the SeaGate Convention Centre.
But an executive of National Republic Bank of Chicago, which has filed litigation to recover more than $4.5 million, said yesterday the 19-story hotel on Summit Street at Jefferson Avenue will not be closed.
"What we're doing right now is just protecting our interest," said Edward Fitzgerald, president of the bank. "We plan on keeping the hotel open … even if we go through foreclosure."
The bank filed a lawsuit this week in Lucas County Common Pleas Court against SNP Investment LLC of Milpitas, Calif., owner of the 212-room hotel. Last year, the bank dropped two foreclosure attempts involving Hotel Seagate after SNP resumed payments, Mr. Fitzgerald said.
Built in 1970 as a Holiday Inn, the hotel has had many owners and names over the years. Sold at a sheriff's sale for $250,000 in the mid-1990s and most recently a Ramada Inn & Suites, the hotel has been owned by SNP since November 2002.
Bipin Seth, a principal in SNP and a defendant in the lawsuit, could not be reached for comment yesterday. He told The Blade in February that his firm was negotiating with two groups to sell the hotel, which is near the Radisson downtown.
Rick Saga of Atlanta said an investment group he is involved with, which owns hotels and other properties, had agreed to buy the Toledo inn for $4.4 million and was supposed to finalize the deal last week.
His group has put $250,000 into the hotel for utilities and other expenses and has signed for other debts paid by the Chicago bank, he said.
But the group of about a dozen investors, primarily from Pennsylvania and California, refused to pay $500,000 of Mr. Seth's personal debt tied to the hotel's loans, prompting the bank's foreclosure action, he said.
Mr. Fitzgerald, of the bank, declined to confirm Mr. Saga's group is a potential buyer or to discuss his claims.
The bank executive would not name any group negotiating to buy the hotel but said one East Coast group intends to spend millions of dollars on it.
The hotel has had some renovations that were paid for by the bank, Mr. Fitzgerald said.
Mr. Saga said his group welcomes the finality of a foreclosure and would be willing to pay more for the hotel, which would become a Doubletree Hotel, because of the money it already has invested.
His group, he said, also is trying to buy Fiberglas Tower and has 20 tenants lined up for that vacant downtown building within a block of the hotel on St. Clair Street.
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