|By John McDermott, The Post and Courier,
Charleston, S.C.McClatchy-Tribune Regional News
Sept. 05, 2012 --The foreclosure of one of the largest full-service hotels in the Charleston region was finalized Tuesday, setting up a possible sale of the lodging.
At a court auction, a representative for U.S. Bank National Association bid $7 million out of the roughly $24.1 million the company is owed from the delinquent mortgage on the Sheraton Charleston Airport Hotel.
Charleston County Master-in-Equity Mikell Scarborough received no other offers at the sale, which took about a minute.
U.S. Bank filed a foreclosure lawsuit in March 2011 against APHM North Charleston LLC after the borrower fell behind on its mortgage payments,
The lender also appointed a company affiliated with Prism Hospitality of Dallas to replace APHM North Charleston as the operator of the 289-room hotel at Montague Avenue and Goer Drive.
The attorney for U.S. Bank could not be reached for comment Tuesday.
The previous owner is closely tied to San Diego-based hotel investor American Property Hospitality Management LLC.
It bought the Sheraton property in 2006, about a year before the recession began, and it took a big financial hit from the foreclosure.
Robert Chartener, executive chairman of American Property Hospitality Management, said in a court filing this year that APHM North Charleston invested $10.2 million in cash in the hotel on top of the $19.05 million it had borrowed to buy it.
APHM North Charleston declined to comment, said Ellis Lesemann, its local attorney.
Court filings show that U.S. Bank had been looking to sell the hotel, which is the standard exit strategy in most foreclosures. Earlier this year, for example, the lender sought to expand its agreement with Prism to allow the hotel operator to shop the Sheraton to potential buyers. That request was later withdrawn.
John Bailey, Prism's chief financial officer, said Tuesday he was not aware of any short-term changes by officials at U.S. Bank.
"I don't think they have an immediate action plan as to whether they're going try to sell it soon or make some improvements and hold onto it for a while," Bailey said.
Visible from U.S. Interstate 26, the eight-story property is just around the corner from the Boeing Co. campus, Tanger Outlet Center and the Charleston Area Convention Center.
It has 13 meeting and banquet spaces.
A local development group and Metropolitan Life Insurance Co. built the hotel in 1982 under the Marriott flag at a cost of $20 million. It was a Hilton property before switching to the Sheraton brand in 1997.
Reach John McDermott at 937-5572.
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