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Poor Judgment Rather than Lack of Business the Likely Culprit if the 600 room
 Executive Inn Rivermont in Downtown Owensboro, Kentucky Closes
By Owen Covington, Messenger-Inquirer, Owensboro, Ky.McClatchy-Tribune Regional News

Jun. 7, 2008 - The Executive Inn Rivermont in downtown Owensboro will likely cease to operate as a hotel beyond its transfer to its newest owners Monday.

Coupled with notices to businesses and future guests on Friday that the hotel needs to be vacated, the firm that has overseen operations at the struggling hotel since its last sale in 2005 won't be retained past Monday.

"We've been told that they are not operating a hotel, period, so we're out," said Ray Hopkins, chief executive officer for Grand Tradition Hotels & Resorts. "At the transfer of the deed to Marshall, they have not employed us to manage the hotel."

The decision about whether the hotel continues to operate past Monday rests with Marshall Investments, which holds the hotel's mortgage. The company was the successful bidder in April at a foreclosure auction and is expected to secure the hotel's deed on Monday.

There has been no official public statement by Marshall about its plans for the 30-year-old hotel, but a statement provided by Mike Fiorella, attorney for current owners Minnesota/Owensboro Executive Inn LLC, indicates that the hotel will be closed.

"The LLC anticipates that Marshall will demand it vacate the hotel premises sometime on Monday," the statement read. "To minimize the adverse impact of the anticipated closing, the LLC is informing its employees, guests and tenants of the situation and is positioning its operations to be able to respond to the anticipated demand from Marshall."

Michael Hayes, a vice president with Marshall Investments, did not immediately reply Friday to a request for information about his company's plans.

Those plans should become apparent next week at the close to a court case stretching back to 2007 that ended in foreclosure with the hotel sold on the auction block in April.

Daviess Circuit Judge Tom Castlen signed an order Friday confirming the sale of the hotel to Marshall following its payment of $182,000, the bulk of which is for city and county property taxes stretching back several years.

During a hearing this week, Castlen had ordered that Marshall was required to complete the sale of the hotel by 3 p.m. Monday after it ignored the 30-day requirement to ink the deal.

All that's left for the hotel to transfer to Marshall's possession is Castlen's signature on the deed, which should be penned Monday before the deadline, according to John Stevenson, a local attorney representing Marshall Investments.

"We'll close (the deal) probably Monday morning or early afternoon," Stevenson said.

Stevenson said he couldn't say for certain whether Marshall would continue operating the hotel beyond Monday but that the decision would be left to Marshall and the 17 banks that will have an interest in the hotel with the ownership transfer.

"Because of the 17 banks, I don't know that there's been any formal decision past Monday at this point," Stevenson said. "I'm not saying that Monday morning we don't get a call."

Steven Baer, a receiver appointed to oversee hotel operations until the sale is complete, testified earlier this week that the hotel would not be able to continue operating for more than two weeks based on its revenue levels and occupancy rates.

Baer declined to comment further Friday on the hotel's operation.

On Thursday, Castlen had denied a motion by Baer seeking the authority to close the hotel and issue a notice to employees that the hotel could close within 10 days.

Federal law requires businesses to give a 60-day notice or be liable for back wages if the business closes sooner. That law would apply if Marshall closes the hotel's doors on Monday, and employees could be eligible for compensation from Marshall.

Hopkins said the hotel will still be open and operating on Monday until the deed is officially transferred, but the management firm's responsibilities will end at that time.

"There's a full house (all weekend) and there's functions going on and we're servicing those," Hopkins said. "There's going to be an effect on everyone. We're trying to minimize that."

The hotel's closure would come at a time when the city is preparing to embark on an expansive phase of its riverfront development, and city leaders have been looking at ways to integrate the current hotel or a new facility into the development.

Owensboro Mayor Tom Watson said the prospects of Marshall Investments finding another interested party to purchase the hotel might be more difficult if the hotel is closed.

"From all indications from the experts I have talked to, that would be the assumption -- that it would be much more difficult to sell," Watson said. "I am certainly disappointed for the employees. Those people have worked so hard to try to ignore all this stuff that's going on. I hope there can be some resolution."

Likewise, Daviess County Judge-Executive Reid Haire said the hotel has been a landmark for the community, but that poor judgment rather than lack of business would likely be the culprits if the hotel closes.

"It's unfortunate it has come to this," Haire said. "When the doors are closed and the tenants are gone and it becomes a shell, the value of that hotel is reduced significantly."


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Copyright (c) 2008, Messenger-Inquirer, Owensboro, Ky.

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