Hyatt Place In Hotel At 1114 Texas Ave.

[pineda]

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Houston Hyatt is in foreclosure

Posting may be factor in Dallas' debate over convention facility

09:36 PM CST on Thursday, February 17, 2005

By BRUCE NICHOLS / The Dallas Morning News

HOUSTON

[Houston19514]

SSSSHHHH, don't let anyone at the Chronicle hear about this news IN THEIR OWN FREAKIN' BACKYARD!!

[pineda]

SSSSHHHH, don't let anyone at the Chronicle hear about this news IN THEIR OWN FREAKIN' BACKYARD!!

It is sad, isn't it? Maybe we need to subscribe to the DMN to hear about breaking news in Houston. Is it oversight, ignorance or deliberate refusal to print this story? Didn't think it was a big enough story, don't know about any story yet, or was the Houston Chronicle asked not to report on Hyatt story, which is it?

[Houston19514]

^ Yeah, and Im not sure which of those is the worst.

[Lowbrow]

I'd say they just got scooped by the better paper.

[YakuzaIce]

Well the chronicle has finally gotten it.

Feb. 18, 2005, 11:48PM

Downtown Hyatt returned to lender

977-room hotel will be conducting business as usual

By L.M. SIXEL

Copyright 2005 Houston Chronicle

The Hyatt Regency Hotel in downtown Houston has been given back to its lender in what people involved are calling a "friendly foreclosure."

The Hyatt Regency will continue to operate the 977-room hotel as usual.

The Hyatt has a lease far into the future, said Don Henderson, vice president and managing director of the Hyatt Regency.

"This building is a piece of real estate," Henderson said. "Real estate goes on the market and off the market all the time."

Henderson likened the situation to the sale of an apartment building. Occupants still pay rent, but to a different company.

The Hyatt, which until recently was Houston's only large downtown hotel, was owned by Rushlake Hotels USA. Rushlake, which didn't return calls, is also in the energy business.

The company also owns the former Sheraton Lincoln, across the street from the Hyatt, which remains closed except for its garage, said John Keeling, senior vice president of PKF Consulting, a hospitality consulting and brokerage firm in Houston.

The Hyatt has been a focal point of downtown Houston ever since former Mayor Louie Welch and other civic leaders celebrated by breaking a magnum of champagne against the side of the new hotel.

On opening day, Dec. 4, 1972, news reports focused on the "grandeur of the hotel" and marveled at its 30-story atrium, glass-enclosed elevators and revolving rooftop restaurant.

Even the new attached parking garage, which was then one of the nation's largest, attracted news coverage.

[Subdude]

Downtown Hyatt returned to lender

Funny how the Chronicle downplays it to make it sound like some normal real estate trasnsaction. I've never heard of such a thing as a "freindly foreclosure". Foreclosure reflects default or insolvency of the borrower; it's not the same as an open-market sale. Presumably the lenders will auction off the property to another buyer, although it really wouldn't be a shock if it closed like many of the downtown hotels in the 1980s.

[jt16]

Funny how the Chronicle downplays it to make it sound like some normal real estate trasnsaction.  I've never heard of such a thing as a "freindly foreclosure".  Foreclosure reflects default or insolvency of the borrower; it's not the same as an open-market sale.  Presumably the lenders will auction off the property to another buyer, although it really wouldn't be a shock if it closed like many of the downtown hotels in the 1980s.

<{POST_SNAPBACK}>

Doubt it closes. There are such things as planned foreclosure as there are planned bankruptcy. Sounds like this might be the case. I'd be willing to bet a truckload of money this hotel does not close. They just went through a pretty extensive renovation of the rooms here this past year. That sounds like a dress up before you unload the property.

[Subdude]

I sure hope it doesn't close. We would lose a great bar!

[LTAWACS]

I sure hope it doesn't close.  We would lose a great bar!

<{POST_SNAPBACK}>

i didnt know there was a bar in there...

[Guest DMRA]

It's just a real estate transaction; hotel won't close.

Office buildings financially go under, but tenants aren't usually affected (yes, sometimes they get kicked out). Marriott has long-term lease and is staying. The real estate will stay, too, open.

DMN had it first because there was more interest -- those who don't want a conv ctr hotel in Dallas could use this as ammo. Houston would rather D not build a conv ctr hotel b/c it would compete with ours.

The real estate community knew about this.

[Lowbrow]

Downtown hotels struggle with growing pains

06:19 PM CST on Monday, February 21, 2005

By Jason Whitely / 11 News

LINK

HOUSTON -- By the looks and sounds of things, downtown Houston is booming with construction and new business. But a closer look reveals another side to the re-development and the economic prognosis may not be healthy for downtown hotels.

KHOU

Behind the bellmen, inside the shiny glass, downtown hotels are reluctant to let the secret out -- business in Houston is not that hot.

"It was kind of a field of dreams so to speak in the hotel business and hotel land -- build it and they will come," said financial analyst Malcolm Browne. "But they put the cart before the horse."

Experts point to the downtown Hyatt as a casualty of a saturated market. In the third quarter of 2000, it had a 79-percent occupancy rate. During the same period last year, it was only 40-percent full.

It was no surprise to analysts last week that lenders foreclosed on the property, though the Hyatt will continue to operate there.

The number of hotel rooms in Houston has doubled in the last five years.

But consulting firm Source Strategies says the supply of rooms is far outpacing the demand.

Source Strategies guesses it's only a matter of time before hotels close or are converted into residential condos. The city is much more optimistic, saying we're only experiencing a bump in the road.

"I think we've got a bump in the road in downtown but across the community it's better and looking a lot better in the future, said Jordy Tollett with the Greater Houston Convention and Visitors Bureau. "So I think it's a short-term problem."

The slowdown in business travel hurt downtown hotels.

The city says business travel is coming back along with conventions. But not fast enough to fill all the rooms. Everyone agrees there are about a thousand too many.

Whether downtown hotels can continue to survive remains to be seen.

[Lowbrow]

Is city footing the bill for high-priced hotels?

08:01 AM CST on Wednesday, February 23, 2005

By Mark Greenblatt / 11 News

LINK

HOUSTON -- Will Houston's poor end up paying for loans the city made to the rich?

If you or I didn't pay our home or car loans on time, we'd expect the bank to coming knocking and fast.

But 11 News discovered the City of Houston loaned some big bucks to some big businesses and they're not paying up. But guess who may end up footing the bill?

"It's a shame is what it is. It's a shame," says Alvin Byrd, a Houston community leader. "What frightens me is the perpetuation, and if they continue to do this. It's a travesty."

And what's he so upset about?

It starts with the Magnolia Hotel, downtown's self-proclaimed new standard for luxury complete with a lavish lobby, a beautiful billiards room, and rooms that can rent for $200 a night.

"Our mission is to revitalize downtown with beautiful new hotels," says the owner Steven Holtze.

He's a hotel tycoon.

"We have three: Denver, Dallas ...," he says.

But at the Houston location, it turns out he had some help -- a $9.5 million dollar loan backed by the city three years ago. The only problem? In all that time, the Magnolia hasn't paid a dime of it back, missing payment after payment even though Holtze says the hotel's making a profit.

"We actually had a pretty, real good year last year," says Holtze.

So, why not pay the loan?

"Well I don't want to get into all the details of exactly what the circumstances are," he says.

"It's a disgrace," says Annise Parker, Houston's city controller.

"No one appears to have been minding the store," she says.

And she says the city is sending a dangerous message to would-be borrowers.

"If you can get to the trough, you can stay there and we will never hold you accountable," she says.

Take the Crowne Plaza Hotel on Smith Street.

It received got a $5 million loan, but they haven't made a payment since the middle of 2003.

"The public ought to be very... enraged," says advocate John Henneberger. "For the city to negotiate a loan and have it go into default that quickly indicates that the city was at best, incompetent."

But this advocate for lower-income development says what's worse is "they've used the money, the only source of funds that exist to help the poor, in order to create a luxury hotel for the rich."

How? It turns out Houston put up grant money it uses for its poorest neighborhoods as collateral on both loans putting more than $14 million dollars at risk.

"If this hotel doesn't pay its money, then that comes out of the future money the city of Houston has to provide playgrounds, daycare centers, homeless shelters," says the advocate.

Which brings us back to Alvin Byrd of the Fifth Ward.

"That's $14 million that could be used to improve the quality of life in this neighborhood, instantly," says Byrd.

Money now in jeopardy he says could, "transform the entire community."

A community where nearly two-thirds of the residents live below the poverty line.

"It would be a travesty if we were to lose future dollars," says Byrd.

But the city's problems with bad loans don't end with luxury hotels. The Defenders discovered nearly $40 million dollars worth of loans, in default, that have to do with development. They were all issued by the Houston Department of Housing and Community Development. And some have been in default for longer than 10 years.

Meet the John Walsh, the man Houston's mayor asked to help straighten this mess out.

The Defenders couldn't find a single payment that the Magnolia Hotel has ever made to the city of Houston. When asked if that surprised him, Walsh said, "No. I can't vouch for the reason why it has taken so long for us to pursue the collection of these loans."

But Walsh says the city might not be able to collect.

"Then if we can't collect it, we'll just take our lumps and do the best we can."

But for Alvin Byrd that's not enough. When asked if the city should hold them accountable. Byrd says, "Absolutely. They would hold me accountable."

The general manager of the Crowne Plaza Hotel told 11 News they're not having money problems either, but said for now their lawyers have advised they don't have to pay the loan.

The City of Houston insists they do and also adds they intend to collect.

[citykid09]

Does this mean that it's closing? What will replace it if so?

[kjb434]

if you read the previous posts, the property just changed hands, the hotel is just leasing the space. This stuff happens all the time in downtowns across the US.