|By Sharon Dunn, Greeley Tribune,
Colo.McClatchy-Tribune Regional News
Jun. 27, 2009--Now a little more than a year into owning the downtown Clarion Hotel and Conference Center, owners are closer to finishing the project.
But it hasn't been without its ups and downs.
Amid spending more than
$1 million to refurbish the aging downtown Greeley hotel's interior, the new ownership group Penta Hospitality, fell behind.
Greeley Regency Hotel, Inc., owned by Arthur Cormier, sued Penta Hospitality LLC in May for defaulting on a $625,000 second mortgage on the $4 million hotel. Weld District Court Judge Tom Quammen signed off on their planned settlement agreement this week.
Penta, ran by Tarun Patel, Mukesh Mowji and Anil Patel, bought the struggling hotel in February 2008 for $4 million, about $500,000 less than what Cormier paid for it in 2001. They have since remodeled the inside and are running it under the Clarion flags. The outside of the hotel, at 701 8th St., is still taking shape.
"Business has been picking up, but it's not as fast as we wanted," said Mukesh Mowji, a principal in Penta Hospitality. "We're suffering from the reputation of the old. It was really bad news and those things still show up in Internet searches. We have had a hard time in getting people to look at the property. We're overcoming those things but not as fast as I would like it. It's doing well, though. We've had month over month increases since we bought it, and especially since the Clarion signs went up."
Mowji said recent events, such as the Greeley Jazz Festival, and this week's Greeley Stampede, have really helped fill rooms.
Penta, of San Jose, Calif., also bought the Quality Inn Central hotel in Denver in June 2008, also from Cormier, to gain a footprint in Colorado. Penta was incorporated in January 2007 and is the result of a merging of Tuscany Investments, CVC Investments and Pacific Hospitality. The principals have worked in the lodging, hospitality and real estate business for more than 20 years.
"We're very, very happy with the hotel," Mowji said. "This is one of our prized possessions now."
Mowji said they are still, however, fighting the bad reviews on the hotel that linger on the Internet from days of old.
Cormier had struggled to fully unload the hotel since he first bought it in 2001. In 2003, he signed a three-year contract with P&S Hotels operated by Paul Patel out of Georgia, and no relation to the new owners. That deal fell through, and Cormier had to take the hotel back by force in 2006.
Mowji said the problem at Penta was simple -- they got behind on their payments.
"Unfortunately, in this business environment, it immediately involved attorneys," he said. " And 99 out of 100 these things are settled with two people sitting across the table."
According to their agreement, Penta had agreed to pay Cormier $7,500 by June 20, $10,000 by July 20 and $150,000 -- which included Cormier's attorney fees up to $20,000 -- by Aug. 20.
The settlement agreement notes that if Penta made those payments, the loan would be reinstated and the payment schedule would be amended. If they default on the new payments, they would be required to pay a default rate of 21 percent interest.
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