|By Jan Falstad, Billings Gazette,
Mont.McClatchy-Tribune Business News
Feb. 2, 2007 - In a public auction lasting less than 10 minutes this morning, investors from northwestern Montana paid $2,263,457 to buy the historic Northern Hotel in downtown Billings.
The investors, who originally had no intension of owning the hotel, basically bought the property to cover their debt. The Boone Trust Group, representing about nine northwestern Montana investors, had claims for more than $2 million against the Northern.
Ted Lovec, president of American Title, conducted the public auction in the lobby of the Yellowstone County Courthouse.
In quiet, but intense drama, Lovec announced the bid by the Boone Trust Group and then asked the crowd of 35 -- about two-thirds involved parties and the rest curious onlookers -- if there were any competing bids.
"First call. Are there any other bids?" he asked.
Only a lone cell phone, muffled in a pocket somewhere, rang.
"This is the third and last call," he said.
"Thank you for your attendance," Lovec said, closing the bidding process in less than 30 seconds.
The hotel owners filed for Chapter 11 bankruptcy protection in March, but couldn't reorganize the finances. So, the bankruptcy court forced a sale after closing down The Northern on Sept. 8.
Dennis Minemyer, a certified public accountant from Missoula who represents the lenders, couldn't answer the key question: Will the historic Northern be remodeled and reopened again as a hotel, be turned into offices and condos or torn down?
"They'll take a couple of months to decide what to do," he said.
Minemyer said that a construction company he wouldn't name inspected the building a month ago and found the structure "sound."
The hotel at the corner of North Broadway and First Avenue North, the adjoining parking garage and the inventory were sold as one package.
The Northern dates back 115 years and was rebuilt after a 1941 fire devoured the four-story wooden structure with a red brick foundation.
The hotel's modern challenges were financial and the property changed hands fairly frequently in a long, slow journey toward today's foreclosure sale.
Robert and Susan Van Riper, who bought the hotel in 2002 largely with loans from other investors, filed for Chapter 11 bankruptcy in April to buy time to reorganize their finances and continue operating the hotel.
Alan Bryan of the Crowley Law Firm in Billings also represents the lenders, now the owners, of the Northern. He said the ideal outcome would have been to have another buyer with enough money to buy the hotel and make necessary repairs.
"It would have been best for everyone if the hotel could have generated income and continued to go on as a hotel," Bryan said. "But that didn't happen."
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Copyright (c) 2007, Billings Gazette, Mont.
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