Adoba Hotel in Dearborn headed into foreclosure; management firm to leave Friday

[MSUguy]

You mentioned structural issues, that would definitely explain the $50 million estimated renovation cost. Marriott is redoing the RenCen rooms and public spaces this year, that is costing them $30 million and it has 500 more rooms. Doesn't sound like the future is very bright for this place

But beyond the back taxes or operating license issues, industry experts are questioning the long-term viability of the hotel and conference center without tens of millions of dollars of needed investment.

"To take halfway measures in terms of renovations just doesn't cut it," said Ann Arbor-based hospitality consultant Charles Skelton. "You're still odd man out because you've got newer, more competitive hotels in other locations and just can't break back in."
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The needed capital improvements — which Ron Wilson, CEO of Troy-based Hotel Investment Services, has estimated at $50 million or more to bring a well-known, full-service flag back to the hotel — bring into question whether such an investment would ever produce a return on investment.

"The cost to bring a hotel like this back online is staggering, [[and) the market and price points for it have passed," Wilson said in an email. "Design, location and its age are working against this hotel from ever being financially viable."

Said Skelton: "Obviously, [[the Adoba's owners) weren't willing to spend the money to remain a Hyatt" because they didn't see a return on their investment. So they've sought brands that would accept lesser quality and lost some of the hotel's competitive edge in the process.

Operating as the Adoba, the hotel has averaged just under 50 percent occupancy the past year, "which is better than Hyatt was doing before it left," said Ed Lennon, managing member of the Edward G. Lennon PLLC law firm in Birmingham, speaking on behalf of Atmosphere, the departing management company.

http://www.crainsdetroit.com/article...-make-comeback