News Column

Holiday Inn and Suites in Newport News up for auction Thursday

May 28, 2014

By Tara Bozick, Daily Press (Newport News, Va.)



May 28--NEWPORT NEWS -- The Holiday Inn and Suites at 941 J. Clyde Morris Blvd. in Newport News is scheduled for a public foreclosure auction in front of the Newport News courthouse at 11:30 a.m. Thursday, according to a public notice.

The hotel owner, Classic Suites LLC, had failed to make full payments on its mortgage from August to October last year, according to documents filed in Newport News Circuit Court. In doing so, Classic Suites, a subsidiary of The Beck Co., defaulted on a $6.3 million loan that was originally borrowed from SunTrust Bank in Georgia. Robert Beck, head of the parent company, had signed the original agreement on July 19, 2006, before the loan ownership was transferred to investors in a pool of commercial mortgage-backed securities.

The loan has since been assigned to a wholly owned subsidiary of Wells Fargo Bank N.A., which is the trustee for the certificate holders and ordered the auction.

The property, built in 2003, is on 3.74 acres and was last assessed at $5.68 million, according to online city records. The franchise rights, including the use of the name Holiday Inn and Suites, won't be conveyed in the sale, according to a notice published in the Daily Press.

Jeffrey Kolessar, senior vice present of development for GF Management in Philadelphia, is managing the five-story, 122-room hotel in the meantime. Kolessar reported in court documents that while hotel profit was down 41.6 percent in January and February, the hotel is making progress marketing to sports teams and landed a deal with Sears Holdings for a Kmart renovation project from mid-March to June 3.

Court records indicate that other Beck Co. hotels could also follow suit. Those loans also originated with SunTrust in July 2006 and are now assigned to Wells Fargo as a trustee for the benefit of investors. Subsidiary Plaza Hotel and Suites LLC, which owns the 150-room Point Plaza Suites on 5.25 acres at 950 J. Clyde Morris Blvd., missed payments from April to July last year on a $5.45 million loan, according to documents.

Beck subsidiary Mulberry Associates, which owns The Mulberry Inn and Holiday Inn Express both located on one parcel at 16890 Warwick Blvd., defaulted on a $7.5 million loan last year, according to court documents.

Beck declined to comment.

Bozick can be reached by phone at 757-247-4741. Sign up for a free weekday business news email at TidewaterBiz.com.

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(c)2014 the Daily Press (Newport News, Va.)

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Source: Daily Press (Newport News, VA)


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