|By Jondi Gumz, Santa Cruz Sentinel,
Calif.McClatchy-Tribune Regional News
Jan. 20, 2010--SCOTTS VALLEY -- A new company took over management of the Scotts Valley Hilton on Wednesday, one day after the 187-room hotel changed hands in a foreclosure sale.
Rim Hospitality, based in Modesto, replaced Endeavor Hospitality, which means Endeavor partners Mitch Hatch and R.J. Escobar, associated with the hotel since it opened in 1999, are out of the picture.
Rich Higdon, the general manager, will stay on, as will the other employers on staff, according to Jill Del Greco, Rim's regional director of sales.
"It will be business as usual," Del Greco said, noting Rim has 28 years' experience and manages 77 hotels in the San Francisco Bay Area, north to Petaluma and east to Sacramento.
She made the rounds Wednesday, visiting the chamber of commerce, and noted Rim's chief operating officer, Russ Cox, is familiar with the community from managing the Santa Cruz Dream Inn.
Cox said Rim was hired by LNR Partners, the special servicer handling the hotel's default on a $17 million loan.
Hatch had said the hotel was profitable the past two years but didn't meet financial benchmarks required by the lender, triggering a demand for a $700,000 reserve fund, oversight by the loan servicer and then the foreclosure auction.
The minimum bid was $10.15 million, but no one bid, so the property reverted to LNR Partners, which represents the group who bought the loan in a package of commercial mortgage-backed securities.
visited the Scotts Valley Hilton on Wednesday, said the hotel has "good employees" and "is in great shape."
For employees working under the "dark cloud" of foreclosure, "things will get better," he said, starting with improved health benefits.
Rim will have someone to oversee the Scotts Valley Hilton but that person will not work on the premises, he said.
Hilton is likely to undertake improvements, such as a new color scheme and bedding, but not right away.
Cox said his focus is on increasing revenue.
"I think I was pretty successful raising revenue at the Dream Inn," he said, recalling his stint there from 1993 to 1997.
Recruiting is under way for a couple of sales positions. Those interested can apply at the hotel at 6001 La Madrona Drive or online at www.hcareers.com, a hospitality job site.
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Copyright (c) 2011, Santa Cruz Sentinel, Calif.
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