Grand Rapids Michigan Intercontinental Hotel
The Grand Rapids Intercontinental Hotel, the largest hotel in the state of Michigan, has filed for Chapter 11 bankruptcy and will begin the process of winding down its operations, MiBiz learned Monday, March 10. Two affiliates that operate the hotel, California - International Hotel Group Inc. (IHG) and California Hotels & Resorts Inc., have filed separate bankruptcy filings, according to a news release from the Michigan Department of Health and Human Services.
Chhatrala, who bought the hotel in 2017, claims the financial problems are related to the cost of an improvement plan. In the applications, the claims of the hotels regarding their financial situation relate to the improvements required by England - based in InterContinental Hotels Group PLC. The inability to fund the improvements has affected their ability to service their debts and capped the amount they can charge for rooms, according to court filings from both companies.
In an affidavit dated September 17, Amicus CEO Dan Yeomans estimated that Chhatrala has more than $1.5 million in outstanding debt, about $2.7 million of which, according to the affidavit, is due in cash. Ch HatralA cites Access Point Financial LLC as a secured claim against Shiva Management Inc., which holds a majority stake in the hotel and other assets and liabilities. While Bhogal said he had a "very good track record" in terms of his conduct and good relations with his staff and management team, he estimated that as of August 31, he had only $3,000 in his bank account.
Yeomans also said Chhatrala risks losing the hotel's connection with InterContinental if a $14 million property improvement plan is not implemented. The $27 million hotel project was originally planned in 2008 but was put on hold after loans dried up at the start of the Great Recession.
The project was revived last summer when it qualified for a $3 million low-interest loan from the Michigan Economic Development Corporation (MEDC), a division of the U.S. Department of Housing and Urban Development (HUD). Mount Pleasant - Lodgco Management opened its first hotel in 1996 and now operates 15 hotels in Michigan. The Grand Rapids InterContinental Hotel is made possible by the generous support of Michigan Community Development Corp., a 501 (c) (3) nonprofit with more than 1,000 employees. MEDD supports businesses in their growth strategies and promotes the growth of vibrant communities across the state as a place to do business and host events.
On average, between 75 and 150 rooms, they share the attributes with Delano's, with restaurants highlighting the farm's movement - too.
More importantly, most major hotel chains have introduced boutique hotel design brands in recent years, he said. Earlier this year, Destination Hotels opened a design hotel in New York City that turned out to be larger than expected in a market dominated by traditional chains and older southern houses. Hilton's Curio brand showcases the city's history and culture, as well as the upcoming Canopy brand, which will engage local neighborhoods at a similarly low price. Delano's looks and vibe have attracted attention "before they've really saturated the market," he says, but not as much as other hotel brands, says David Schreiber, senior vice president of marketing at Destination.
Schrager, who also co-founded one of the world's first boutique hotel design brands, the New York Edition Hotel, has since left Delano, but continues to work for the boutique hotel - ideal through his collaboration with Marriott, which collaborated on the Edition Hotel.
Amicus Management, the court appointed trustee, has resisted the bankruptcy filing, initiated proceedings and requested that it remain under the insolvency administration of the company at the state court. In a September 17 memo filed in bankruptcy court, Amicus Management and its attorney, David H. Miller, claimed in the memo that Chhatrala filed for bankruptcy to stop any state - lawsuits that would expose the company's mismanagement of the property. A request for comment from the U.S. Attorney's Office for the Eastern District of Michigan was not immediately answered.
The company also said that while it planned to transfer some of its assets to Bhogal Enterprises, the deal had not been completed before it filed for bankruptcy.
Delano, which offers a design ideal for social experiences, has become an industry standard as major hotel chains such as Marriott and Hilton introduce new boutique brands for millennials and design savvy travelers. According to a recent report by the Hotel Industry Association, boutique hotels account for a growing share of hotel rooms in the US, with about 103,000 rooms compared to 4.9 million traditional rooms. That's 117.74 traditional hotels in 2010, compared with 121,842 rooms at the end of last year, or about 3.5 percent.
Last year, Third Coast renovated a former gas station on the corner of Michigan Avenue and Grand River Street. In addition, last year an abandoned petrol station was replaced by a combination of a car wash and a dog wash, and this year a dog wash.