|By Jackie Jadrnak, Albuquerque Journal,
N.M.McClatchy-Tribune Regional News
Nov. 26, 2012--SANTA FE -- The Hilltop House Hotel, which has held a prominent location since it opened in the 1970s and is touted as the only locally owned hotel in Los Alamos, is facing foreclosure.
Los Alamos National Bank filed the action in district court Oct. 19 after payments had not been made on more than $4 million owed.
Ronald Selvage, who with his wife Kimberly are the two individuals named in the foreclosure action, said the ownership group has submitted a plan to the bank to restructure the debt and hopes to get a response soon.
"I'm optimistic," Selvage said in a telephone interview.
He blamed the hotel's problems partly on cutbacks on contracts issued by Los Alamos National Laboratory, and partly on the opening of a Holiday Inn Express nearby in November 2010.
In dealing with its own shrinking budget, LANL cut the number of contractors it has hired in the last year or two. People with companies holding those contracts often would stay at the Hilltop House for at least four nights at a time, and sometimes for two weeks, Selvage said.
As for the Holiday Inn, he said, "They certainly have newer facilities. A new hotel is going to have more modern facilities."
Selvage, who acts as managing partner for Hilltop House LLC, a pool of investors who bought the hotel in November 2005, said, "We did OK in 2011. This year (lack of business) really started impacting us ... January and February is when revenues really started going down."
About a year ago, he said, he put the hotel in the market to see what interest there was. "We had gotten a couple of offers recently," Selvage said, adding that the ownership group voted not to sell, primarily because the prices offered were not good enough.
Local news reports noted that the hotel lost its affiliation with Best Western in June because it did not meet the franchise's standards.
According to the court filing, Los Alamos National Bank lent the new Hilltop House owners $4.8 million on Sept. 30, 2005, with the loan secured by the property and its improvements at 400 Trinity Dr.
A renewal of that promissory note the next year was executed for a little less than $4.8 million and also gave the bank a security interest in the property's liquor license.
Another note was issued March 1, 2011, of almost $4.3 million.
Payments were not made when due, and the bank contacted the owners on Sept. 25, telling them to cure the default by Oct. 5, according to the lawsuit.
On Oct. 19, the court invoked a 16 percent default interest on the amount owed, invoking the same rate on another $35,000 loan issued Feb. 10 to the hotel's owners.
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