|By Thomas Bailey Jr., The Commercial
Appeal, Memphis, Tenn.McClatchy-Tribune Regional News
Dec. 03, 2012--Two California businesswomen have just purchased a failing, rundown Memphis hotel at a big interchange, and plan to breathe new life into it with the management of on-site owners and up to a $1 million refurbishment.
Grace C. Hu, 68, and Jenny Zhu, 53, on Friday paid $1.25 million for the 196-room Governors Inn & Suites at 2490 Mt. Moriah, at I-240. The seller was Oklahoma-based Dutt Krupa LLC.
Built in 1974, the four-story hotel across Mt. Moriah from Chuck Hutton Chevrolet also has been branded as a Holiday Inn and a Ramada over the years.
"Business is bad," Hu said, noting that occupancy hovers at just 10 percent but acknowledging that the poor performance is why the selling price was so low.
"We want to be at 50 percent occupancy within one year, maybe within six months," she said.
Hu immigrated from Taiwan in 1970, and is a Re/Max real estate broker and developer who served eight years on the City Council of the Los Angeles suburb, Cerritos (pop. 49,000). She was mayor two of those years, 1995 and 2000.
Her longtime friend and real estate partner, Zhu, immigrated from northern China and has been running an import/export business in Riverside County. Zhu sought out Hu, whom she described as "a very successful woman, very famous in Chinese society" for being the first Asian woman elected in Cerritos.
Hu spotted the Memphis hotel listing on the Internet several months ago. The low price impressed her.
"A great deal," she said. "In my town, a house cost that much." Hu estimated a similar sized hotel in Cerritos would cost at least $30 million.
She and Zhu visited the Memphis property one day in early November, and made the decision to buy that night.
"She's pretty quick," said Tony Westmoreland, affiliate broker with One Source Commercial. He represented both the buyer and seller in the sale.
"They came to town ready to buy the hotel," he said. "California buyers are used to paying upward to $30,000 to $60,000 per key, so when you can find something for $6,000 or $7,000 per key, it's a pretty good deal."
The 107,130-square-foot, L-shaped building is sound structurally. It's got larger-than-average hotel rooms, meeting rooms and banquet facilities that can accommodate hundreds, a fitness center and even a closed restaurant.
But the place needs much cleaning, painting, fixing up and especially some on-site management.
That's why Zhu and her husband, Jack, will stay and live on site as Hu returns to California on Tuesday. Hu plans to return to Memphis monthly.
The previous owners visited just two or three times a year, Hu said she was told. "From the business experience I have, I think the owner has to be here. This size hotel, the owner has to be here."
Hu described Zhu as "very smart, well educated" and noted her equal partner had been an English professor in China.
Their first priority is to thoroughly clean the facility. The women stayed busy over the weekend seeking estimates for cleaning the carpets and windows. They'll also repaint the mustard-color exterior a different color, renovate the landscaping and by summer have the swimming pool replastered and reopened.
They plan to buy new bed sheets and pillow cases, upgraded towels, soaps and shampoos. "Now, the quality is not so good," Hu said.
The old TV sets will gradually be replaced.
They also plan to install security cameras and hire a security guard.
The hotel sign states the daily rate is $39.99 and up and the weekly cost is $165 and up.
The new owners plan to keep the rates low. That's one reason why they won't offer a free breakfast, but do plan to start offering coffee and treats in the lobby.
They will also change the name of the hotel in coming months.
Under their ownership, the hotel plans to join the Greater Memphis Chamber and become active in support of schools and other community efforts, Hu said.
"I know how to improve the facilities and increase the sales," Hu said. "I have the confidence."
(c)2012 The Commercial Appeal (Memphis, Tenn.)
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