“We will be open for the season,” said Jack Westergom, founder and managing director of the Los Angeles headquartered hospitality advisory firm Manhattan Hospitality Advisors. Westergom recently stepped into the owner’s role in the wake of the late- October foreclosure filing against RAL Mountain Village Lodging LLC by its unlikely lender, Swedbank.
“Our goal to get caught up on all receivables,” he said. Not only have employees not been fired, he said, “They are not going to be fired.”
In fact, “We’re looking for ways to expand the business to employ more people over time…to make this the kind of asset you’ll be proud of,” he continued.
“We want to make sure that community and world know that these hotels are operating,” said Mayor Bob Delves.
“As far as I’m concerned we are status quo or better.”
Swedbank bills itself as the leading bank in Sweden, Estonia, Latvia and Lithuania with operations in Denmark, Finland, Norway, Western Russia, Luxembourg, Ukraine, China, Japan and the US. The bank acquired the construction loan on the Capella property in 2008 (while it was still being built) following the bankruptcy of the original project lender, Lehman Brothers. Lehman had offered both the Capella and the Inn at Lost Creek as collateral on another financial transaction with Swedbank.
“We never asked for this, we ended up with it on accident,” said New York-based Swedbank vice president Anna Hertzman, who separately addressed council at the same meeting.
Although Swedbank is not an active real estate lender in this country, Hertzman said that the bank decided to invest another $60 million in the property following Lehman’s demise.
“We decided we believe in this, we will continue funding the construction,” she said.
“Since the hotel opened, we have funded shortfalls of $400,000 a month, and we continue doing so because we believe the hotel will become successful one day.”
“We just came to a point where to protect our collateral as a bank you file foreclosure – at least you do these days.”
Westergom said that not only will the properties remain open, but he will be seeking ways to improve the quality of their products, services and service delivery.
“I think these assets are viable assets; there’s no reason why they shouldn’t be successful,” he said.
“Our goal is to see what we can do to make these hotels self-sufficient so they don’t have to be supported by a bank.”
Without divulging any specifics, “We’re looking at putting in place a number of things to generate more business and tax revenue,” he said.
While the hotels are going through the foreclosure process, they have not yet been foreclosed upon, Westergom clarified. RAL Companies and Affiliates President and Chief Executive Officer Robert Levine remains the owner of the properties, which are scheduled for sale early next March, and has not filed for bankruptcy, he said.
“We’re really excited about the hotels and the opportunity to make them something special,” he said.
“I was encouraged to see that the receiver was in fact a hospitality professional,” not strictly a financial person with no experience in the hospitality industry, said Delves. “I was encouraged by that right out of the blocks.”
And there’s already a sign that Westergom is thinking big picture.
“We need to help promote Telluride Mountain Village because by doing that we will actually promote our hotel,” he said
“I think we’re in a lot better shape than we could be, given all the moving parts,” said Delves.
“I’m seeing a glass half-full.”