ELYRIA — The Elyria Holiday Inn will go to sheriff’s sale on April 21 with bids starting at $2.882 million.

The hotel, built in 1964, has been in receivership since last year as the foreclosure case against owners Ely Associates worked its way through the court system.

According to court records, the company failed to make good on a $6.3 million loan from Beal Bank, which filed for foreclosure last year.

The hotel was appraised at $4.2 million, and the contents — from dinner plates to beds — were valued at another $123,000, according to county sheriff’s records.

Tom Pratt of BBP Partners, who has served as court-appointed receiver, said that Beal Bank plans to bid on the hotel, which remains in operation.

“They’ll buy it and figure out what to do with it,” Pratt said, although he added that he doesn’t know what the bank’s strategy is.

The bank will be able to bid up to the full loan amount of $6.3 million without having to pay any extra money, he said. If the bank gets the hotel for that price, it would stay on the bank’s books as a nonperforming loan.

“There’s no loss or gain until they sell it to a third party,” Pratt said.

But another buyer could bid on the property in an amount less than the loan, in which case the bank would have to decide whether it wants to spend the extra money to keep the hotel or take the other bidders’ money to cover the cost of the loan, he said.

Pratt said he doesn’t know if anyone else plans to bid on the hotel, but some people have inquired about it.
Pratt said if the bank gains control of the hotel, it likely will bring in its own property manager to replace him in his role overseeing the hotel.

He said he’s unaware of any plans to close the hotel, which has more than 200 rooms, and put the 65 employees there out of work.

“The hotel will continue to operate for the foreseeable future,” he said.

When the foreclosure lawsuit was filed last year, Ely Associates also was in arrears on state sales taxes as well as city and county lodging taxes. The company also faced the loss of the Holiday Inn brand after falling behind in paying franchise fees to the InterContinental Hotel Group.

All back taxes and fees have since been paid, Pratt said.

Contact Brad Dicken at 329-7147 or bdicken@chroniclet.com.

---

Print this story
Report an inappropriate comment

---

In order to comment, you must agree to our user agreement and discussion guidelines.

Need help? Email Us.

---