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Posted: October 31, 2013 New auction for downtown hotel could be in December

By Andrew Doud
Taken from the Leader-Telegram
 

A foreclosed downtown Eau Claire hotel and convention center could be back on the auction block for a third time as early as December.

City economic development director Mike Schatz admitted frustration that the prominent downtown building at 205 S. Barstow St. doesn't have a new owner after multiple attempts.

"We certainly would like to see some resolution as soon as possible," he said.

As of Tuesday, the Eau Claire County sheriff's office had not received a request to schedule the former Ramada Convention Center for the Nov. 19 auction, which leaves Dec. 3 as the earliest foreclosure auction at which the building could be bid on again. The sheriff must provide 21 days' notice before a property is listed for sale and attorneys in the foreclosure case also must publish advance notice of the sale in the 

in the newspaper.

 

Student rental idea

Residents at recent City Council public hearings have asked if developers proposing the Confluence Project would remodel the hotel for university student housing instead of constructing a new $26 million building a block away.

Project backers had considered that concept but decided it wasn't economically viable, according to Dan Clumpner, principal at Commonweal Development, one of the Confluence developers.

"Repurposing the hotel for student residential housing is substantially more costly that remodeling the building as a hotel," he wrote in an email to the Leader-Telegram. That's especially true for the high-demand, apartment-style student housing planned as part of the Confluence Project, he added.

"Clearly, a renovated hotel is the highest and best use for this particular property," he wrote.

Investors have been leery of the former Ramada hotel because of the current low level of demand for downtown hotel rooms, Clumpner said. But he believes that would improve with the completion of new JAMF Software offices downtown near Phoenix Park and the approval of the community arts center proposed as part of the Confluence Project.

 

Value falls

The hotel and convention center, which lost its Ramada franchise under owners that brought it into foreclosure, has remained open for business through a company appointed by the court to run the hotel while it's in foreclosure.

Based on the hotel's condition and average occupancy rate, the building's value fell in the city's property revaluation completed this year, city assessor Al Andreo said.

Previously the city valued the land, building, and hotel furnishings and equipment at $1.92 million, but its 2013 valuation slipped to $1.76 million, according to Andreo.

 

Low bids

Both of the previous auctions fetched winning bids below the property's tax-assessed value.

At the first auction, on July 2, Singh Brothers Management - the same family that owned the hotel since 2004 and owe about $1.61 million in the foreclosure case - bought the hotel for $1.41 million. But they failed to meet the deadline to pay the full cost of their bid, as did Minneapolis investor Wayne Miller, who won the Sept. 17 foreclosure auction with a $1.655 million bid.

The option to buy the hotel then went to the Sept. 17 auction runner-up, Minneapolis real estate attorney Alan Van Dellen, who bid $1.651 million on behalf of clients. Court records show he did not submit a check to the Eau Claire County clerk of circuit court by the Monday deadline to buy the building.

Despite the multiple tries to attract a new owner, Schatz remains optimistic that an investor willing to modernize, renovate and keep up the building can turn around the hotel.

"There's potential for a hotel downtown to be successful," he said.

Schatz said the hotel's problems have not hampered downtown revitalization efforts.

Pointing a few blocks north of the hotel, he noted that $15 million in new property value is being added to the Phoenix Park area through the new JAMF Software offices and a large apartment building.

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