The Richmond Marriott West on Dominion Boulevard in Glen Allen. (Photo by Michael Schwartz)
A tug-of-war is being waged over a troubled hotel in Innsbrook.
The lender on and owner of the 242-room Marriott Richmond West are fighting over whether a receiver should be appointed to take control of the 12-year-old-hotel, which is underwater and in default on its mortgage.
U.S. Bank filed suit Aug. 20 in Richmond federal court against an entity tied to Kentucky-based Columbia Sussex, which has owned the property at 4240 Dominion Blvd. since its construction in 2001.
![Download the lawsuit [PDF]](/wp-content/uploads/2013/08/Marriott-Richmond-West-suit-224x300.jpg "Bank sues owner of embattled local hotel 2")
Download the lawsuit [PDF]
Through Columbia Properties Richmond, Columbia Sussex took out a loan of $31.5 million on the six-story, 154,000-square-foot property. The current balance is $31.9 million, according to the suit. The hotel sits on 6.7 acres across from Wells Fargo’s large Glen Allen corporate campus on Dominion Boulevard.
The suits states that the borrower said it is in a “cash trap” and intentionally defaulted on the loan late last year because the hotel wasn’t generating enough income to cover the debt payments. Columbia Sussex owns dozens of hotels across the country, largely under the Marriott brand.
The lender claims the property is “exhibiting signs of accelerated obsolescence” and needs $8 million in refurbishments. It pegs the fair market value of the property at $21 million, “resulting in a grossly under-collateralized loan.”
The lender has asked the judge to appoint ARL Glen Allen Management as receiver.
Courts often appoint receivers in disputes over hotels and other revenue-generating properties. Receivership allows the lender to have an experienced property operator take over and continue collecting income until the issue is resolved, sometimes ultimately through foreclosure.
Derek Haught, vice president of acquisitions at Columbia Sussex, said the company has no comment on the case.
Andrew Foti, an attorney in Washington with Nixon Peabody, did not respond to several requests for comment.
Columbia Sussex recently unloaded another of its Richmond hotel properties.
In December, it sold the Crown Plaza West on West Broad Street to a buyer in Portland, Ore., for $2.5 million. That was the company’s only other property in Richmond, according to its website.
The Richmond Marriott West on Dominion Boulevard in Glen Allen. (Photo by Michael Schwartz)
A tug-of-war is being waged over a troubled hotel in Innsbrook.
The lender on and owner of the 242-room Marriott Richmond West are fighting over whether a receiver should be appointed to take control of the 12-year-old-hotel, which is underwater and in default on its mortgage.
U.S. Bank filed suit Aug. 20 in Richmond federal court against an entity tied to Kentucky-based Columbia Sussex, which has owned the property at 4240 Dominion Blvd. since its construction in 2001.
Download the lawsuit [PDF]
Through Columbia Properties Richmond, Columbia Sussex took out a loan of $31.5 million on the six-story, 154,000-square-foot property. The current balance is $31.9 million, according to the suit. The hotel sits on 6.7 acres across from Wells Fargo’s large Glen Allen corporate campus on Dominion Boulevard.
The suits states that the borrower said it is in a “cash trap” and intentionally defaulted on the loan late last year because the hotel wasn’t generating enough income to cover the debt payments. Columbia Sussex owns dozens of hotels across the country, largely under the Marriott brand.
The lender claims the property is “exhibiting signs of accelerated obsolescence” and needs $8 million in refurbishments. It pegs the fair market value of the property at $21 million, “resulting in a grossly under-collateralized loan.”
The lender has asked the judge to appoint ARL Glen Allen Management as receiver.
Courts often appoint receivers in disputes over hotels and other revenue-generating properties. Receivership allows the lender to have an experienced property operator take over and continue collecting income until the issue is resolved, sometimes ultimately through foreclosure.
Derek Haught, vice president of acquisitions at Columbia Sussex, said the company has no comment on the case.
Andrew Foti, an attorney in Washington with Nixon Peabody, did not respond to several requests for comment.
Columbia Sussex recently unloaded another of its Richmond hotel properties.
In December, it sold the Crown Plaza West on West Broad Street to a buyer in Portland, Ore., for $2.5 million. That was the company’s only other property in Richmond, according to its website.