An investment group including local developer Roger Trettel and a noted Kaleida Health transplant surgeon have emerged as the winning bidders for the Grand Island Holiday Inn Resort & Conference Center.
The investment group agreed to pay $4 million for the 263-room hotel, following a hectic auction where 19 bids volleyed back and forth Wednesday morning. The group outbid an Elmira-based hospitality industry firm that also expressed strong interest in the property.
"The bank is very happy," said David Fiegel, Blackbird Asset Services LLC president, who handled the auction for Royal Bank of Canada.
Royal Bank took control of the Holiday Inn after being owed more than $7.9 million in back mortgage payments and other charges. The Holiday Inn remained open and fully operational during Royal Bank's ownership period.
"The price is right where they (Royal Bank) needed to be," Fiegel said.
In all, 10 people registered to bid and it attracted a crowd of approximately 55 people including investors, real estate insiders and some from local hospitality circles.
With Fiegel's commission, Trettel's group will be paying $4.4 million for the hotel, with the deal expected to formally close by early December.
Among Trettel's investment partners is Dr. Fadi Dagher, a transplant surgeon at Buffalo General Hospital. Two other investors are from outside the region, Trettel said.
For Trettel, a Grand Island resident who has invested heavily in downtown Buffalo properties, the deal is about enhancing an already busy hotel. The Holiday Inn is the first hotel in Trettel's real estate portfolio.
"It's a good opportunity," Trettel said. "It is a one of a kind property and location."
Trettel and Dagher said they expect to make some upgrades to the hotel and may look at its brand affiliation. Since the hotel opened in 1973, it has always operated under a Holiday Inn corporate flag and the current Holiday Inn franchise agreement expires in 2014.
Despite the financial problems of previous ownership groups, the Holiday Inn has always had healthy room occupancy rates and cash flow. The hotel has been operating at an 85 percent room occupancy rate and is expected to produce more than $3.7 million in gross room revenues this year and overall revenues of nearly $5 million this year.
Royal Bank, last year, invested $910,000 in renovations for the property.
Fiegel said bookings are up 14 percent this year with 38 weddings planned for 2013.
"This is not a distressed or turn-around property," Fiegel said.
The full-service, 263-room hotel sits on a 12.68-acre parcel along Whitehaven Road and overlooks the Niagara River. The hotel's amenities include a 28,000-square-foot banquet or event room, two pools, a fitness center, business center, boat dock and full-service restaurant.