Omni to leave Detroit.

**bailey** · September-09-10, 10:05 AM

Omni Hotels have decided to leave Detroit. The company says if they can’t sell the Omni Detroit Hotel and River Place by October 12th they will close down.
The 108 room hotel has been a riverside fixture for more than a decade.
....Kboudi they’re trying to help 76 employees find other jobs
[[Copyright 2010 WWJ Radio. All Rights Reserved.)

Isolated location, but very cool. Too bad.

Also, Hilton Garden Inn's owners have defaulted on their 25 million dollar loan and are being sued.

**Hypestyles** · September-09-10, 01:48 PM

hmm... hopefully some independent outfit will take over..

**Packman41** · September-09-10, 02:50 PM

Wasn't the Detroit Hilton Garden Inn developed by John Ferchill? Does he still have an ownership interest?

**401don** · September-09-10, 03:14 PM

Amazed the Omni held on as long as it did. Even though the rooms were well maintained, the common areas, restaurant/bar, etc. were not. I always thought this hotel needed an outdoor pool. It had the grounds and could have differentiated itself from the other "downtown" properties. It would make a really nice retirement home with the large guestrooms, riverfront setting, etc.
It's great that it's closing for all us out-of-towners who can go to hotwire or priceline and be sure they won't get stuck with the Omni. Believe it or not, Priceline still rates it a 4* hotel.

**LeticiasWeb** · September-09-10, 08:58 PM

Oct 12th..........what da hell? I just booked a room at the Omni for Oct 7- Oct 14. Think I should cancel? How is the area around the St Regis and Courtyard by Marriott [[DT) these days?

Thanks a bunch,
Leticia

**Trumpeteer** · September-09-10, 09:18 PM

Originally Posted by LeticiasWeb

Oct 12th..........what da hell? I just booked a room at the Omni for Oct 7- Oct 14. Think I should cancel? How is the area around the St Regis and Courtyard by Marriott [[DT) these days?

Thanks a bunch,
Leticia

Courtyard Marriott on Jefferson is top notch. Been that way for several years now.

**Packman41** · September-09-10, 09:25 PM

Hello Leticia:

St. Regis was put into receivership in February 2009 by ShoreBank of Chicago and on August 20, 2010 Shore Bank was closed by regulators. But I'm sure it is still open for business.

Here is a link to a Crains article discussing the challenges for hotels in the Detroit marketplace and provides a list of what they call "Hotels In Trouble.''

http://www.crainsdetroit.com/article...UB01/308299993#

Hope this gives you some guidance in making a reservation.

**LeticiasWeb** · September-09-10, 09:26 PM

Just checked the price for the St Regis and rooms are going for $47.00 a night. Marriott about $159.00 a night. I take it the area around St Regis has gone to shit and/or the hotel has.

Last few times I was in Detroit, I didn't have a chance to go DT.

I'll call the Omini in the morning to see what's going on.

Bunches of thanks,
Leticia

PS
Packman, thanks for the link, I'll check it out.

**spiritofdetroit** · September-09-10, 09:43 PM

The Regis is indeed open. The area surrounding is fine - New Center is actually rather busy throughout the day, however if you need transportation downtown that could be an issue - not so sure how reliable the St Regis shuttle is. That said, I have no idea about the status inside the St Regis.

You can always try priceline. I've scored the Marriott at the RenCen for $70 several times, and the Holiday Inn Express, which is actually pretty nice, for $40 on a couple of ocassions.

**spiritofdetroit** · September-09-10, 09:46 PM

Also -

As I understand it, there is a good chance the pending deal will go through - the hotel will just no longer remain an Omni. Closure is only of the already pending deal fails, so it is not as if they dont have a buyer in place

**Lowell** · September-09-10, 11:22 PM

Too bad. It has great boutique hotel qualities. I would think clever management and marketing could make it work. When asked for places to stay in Detroit, the Inn on Ferry and the Omni were always my first two recommendations. Once the riverwalk is completed it will be even more enhanced. Its river side vistas,he converted Parke Davis lofts and surrounding area are very nice. Look for someone else to take a run at it.

**adamjab19** · September-10-10, 03:39 AM

Originally Posted by bailey

Also, Hilton Garden Inn's owners have defaulted on their 25 million dollar loan and are being sued.

How the hell is this place having trouble!?

If you can't make a hotel profitable or be able to manage moneys to pay off your loan in that area you need to not run a business!

**Packman41** · September-10-10, 07:06 AM

To Bailey:

Answered my own post [[#3) by reading the Detroit News this morning - the Hilton Garden Inn went to foreclosure sale last week.
http://detnews.com/article/20100909/...tel-in-Detroit

Article quotes:

"The Hilton Garden Inn Detroit Downtown was sold in a foreclosure auction for $19 million last week, and the new owner has filed a lawsuit against the former owner -- who is the Cleveland developer behind the $200 million renovation of the Westin Book Cadillac."

"The lawsuit says the Ferchill team has an outstanding balance totaling $24.5 million on its loan, including fees and penalties. Wells Fargo and Capmark want the Ferchill officials to pay off the $5.5 million gap that the $19 million foreclosure sale price a week ago Thursday didn't cover, according to the lawsuit. The new owners also requested that a court-appointed receiver oversee management of the hotel, which is still being run by the Ferchill firms."

Normally, you would not let a property be sold in foreclose IF you thought the property was worth more than the loan balance - especially, if you gave a personal guarantee to the lender.

**JBMcB** · September-10-10, 08:16 AM

Originally Posted by Packman41

To Bailey:

Normally, you would not let a property be sold in foreclose IF you thought the property was worth more than the loan balance - especially, if you gave a personal guarantee to the lender.

Normally, wouldn't the holder of the note have a lien on the property if it's in default? How did it get sold?

Also, when a property gets sold, if there are any outstanding debts on it, they are listed on the closing papers. If you are the buyer and they are still on there, you are responsible for them, period. If you made a deal to get rid of them with the previous owner, then they had better not be on there when closing, otherwise it doesn't really matter what the previous owner promised, because, legally, you are responsible. Property contracts and transactions are immune from verbal agreements, everything needs to be in the closing contract or it doesn't matter.

**BrushStart** · September-10-10, 08:31 AM

How much impact is this going to have on new Ferchill redevelopment plans in the city?

**iheartthed** · September-10-10, 09:20 AM

Originally Posted by BrushStart

How much impact is this going to have on new Ferchill redevelopment plans in the city?

Yeah... like the Book Tower. Mr. Ferchill said that if the city got rid of the Lafayette Building, which absolutely had to come down according to him, that he would redevelop the Book Tower.

**swingline** · September-10-10, 09:23 AM

Originally Posted by Lowell

Too bad. It has great boutique hotel qualities. I would think clever management and marketing could make it work. When asked for places to stay in Detroit, the Inn on Ferry and the Omni were always my first two recommendations. Once the riverwalk is completed it will be even more enhanced. Its river side vistas,he converted Parke Davis lofts and surrounding area are very nice. Look for someone else to take a run at it.

Agree with Lowell on this one. There are lots of positive and unique attributes of this property. Maybe another owner/operator team, unburdened of some of the property's debt, can make a go of it.

Some additional visibility would help. Every effort should be made to get a deal with one of the building owners on the corner at McDougall and E. Jefferson to allow some signage. Also, the restaurant was never able to realize its revenue potential because it has no view of the river. Were riverside windows not installed during the hotel conversion because of historic rehab tax credit restrictions? Are the restrictions still applicable? Just wondering.

This is a very cool hotel. I hope it can find a new owner.

**Packman41** · September-10-10, 10:08 AM

Originally Posted by JBMcB

Normally, wouldn't the holder of the note have a lien on the property if it's in default? How did it get sold?

Also, when a property gets sold, if there are any outstanding debts on it, they are listed on the closing papers. If you are the buyer and they are still on there, you are responsible for them, period. If you made a deal to get rid of them with the previous owner, then they had better not be on there when closing, otherwise it doesn't really matter what the previous owner promised, because, legally, you are responsible. Property contracts and transactions are immune from verbal agreements, everything needs to be in the closing contract or it doesn't matter.

The lender does have a first mortgage lien on the property. The property is sold at a foreclosure sale and anyone can bid on it, but subject to the liens in place. If the first mortgage lender has the highest bid then it is sold to them and wipes away the junior lien holders. If the highest bid is less than the amount of the outstanding first mortgage, then the lender can go after the owner personally for the difference between the amount owed and the winning bid amount.

Whenever an owner has a foreclosure and then a lawsuit for the deficiency amount then other lenders are sure to notice -- and not in a good way.

**pkbroch** · September-10-10, 11:50 AM

Originally Posted by LeticiasWeb

Oct 12th..........what da hell? I just booked a room at the Omni for Oct 7- Oct 14. Think I should cancel? How is the area around the St Regis and Courtyard by Marriott [[DT) these days?

Thanks a bunch,
Leticia

Courtyard is nice, but had a friend who stayed at the St. Regis and checked out the same evening. Read the reviews on Trip Adviser. Although they are mixed TA is usually a pretty good guide for hotels.

http://www.tripadvisor.com/Hotel_Rev..._Michigan.html

**casscorridor** · September-10-10, 02:15 PM

Seeing that I live in Greater Downtown, I have never stayed in a hotel here before. I've been in a room at MCC and wasnt really impressed but it was nice nonetheless.

As far as the Omni and Rivertown, I hope that area can pull trhough. That areas potential is limited because the large gap between that district and Downtown of weedy empty lots and crumbling streets and buildings, as well as lack of easy transit. A rail line on Jefferson would remedy this and I think it should be next built after Woodward. The riverfront is absolutely essential to reviving the core of Metro Detroit and should't be underestimated.

As far as St. Regis and New Center, I always thought of it as a fancy hotel but i guess I was wrong. But I do know it will be the closest hotel to a light-rail station [[Maybe tied with the Courtyard Marriot if downtown alignment A is chosen) and the only hotel north of I-75, so I can't imagine it closing. Also New Center is in tough times but is still overall on the rebound, and the rebound will accelerate when the rail opens.

**Rocko** · September-13-10, 06:36 PM

I think a hotel right there on the river off E. Jefferson is a pretty decent and certainly unique venue. How many other Detroit hotels are directly on the riverfront these days? RenCen and.......

Hopefully they're able to pull something through for this historic property. That whole area of the city is slowly picking up steam and generating interest, not only because of long standing establishments such as the Stroh RiverPlace, Omni, and Andrew's on the corner, but newer places such as the Park Davis lofts, Atwater Block Brewery, the charter school in the old Franklin Furniture Building, etc. Joseph Campau is a crazy place on weekend evenings!

I second the idea that East Jefferson should be the next arterial to have light rail after Woodward. This is a district that not only has a fairly decent base for commercial, entertainment/dining, and residential, but has excellent potential being only a few blocks from the riverfront and passing many important establishments. And it's certainly wide enough for a center-of-the-road streetcar style operation.

**mwilbert** · September-13-10, 07:20 PM

Jefferson would be a logical place to put a rail line, but as far as I know current transit volumes on Jefferson are too low to get federal funds for light rail [[but high enough for BRT, thus doubly annoying the pro-LRT, anti-BRT folks), so that isn't likely to happen anytime soon.

**mikefmich** · September-13-10, 09:43 PM

Rail lines.....hotels.......lines to go where, and people in hotels for what?

Everyone talks about mass transit & putting rental people downtown....business and employers will work much better. Without that...what exactly is the reason for transit and hotel space? Like these hotel operators are all inexperienced, and they are letting their properties go down the tubes for shits and giggles?

lincoln8740 · September-14-10, 08:02 AM

Originally Posted by Packman41

If the highest bid is less than the amount of the outstanding first mortgage, then the lender can go after the owner personally for the difference between the amount owed and the winning bid amount.

.

Not if the loan was non-recourse.

or
the "owner" is an LLC[[or some other formation) which has no other assets and is now defunct, making the individual people that are a part of the group virtually judgment proof.

**Packman41** · September-14-10, 11:00 AM

Originally posted by Lincoln8740:
"Not if the loan was non-recourse.

or
the "owner" is an LLC[[or some other formation) which has no other assets and is now defunct, making the individual people that are a part of the group virtually judgment proof."

This is all true, except the article http://detnews.com/article/20100909/...#ixzz0zWIKGAcj specifically states that, "The lawsuit says the Ferchill team has an outstanding balance totaling $24.5 million on its loan, including fees and penalties. Wells Fargo and Capmark want the Ferchill officials to pay off the $5.5 million gap that the $19 million foreclosure sale price a week ago Thursday didn't cover, according to the lawsuit."

Banks are notorious for requiring personal guarantees from the individuals that comprise the LLC and not just the LLC. In light of the lawsuit that has been filed it appears Wells Fargo has personal guarantees from Ferchill officials.