A foreclosure sale of the Clarion Hotel and Conference Center is scheduled for Jan. 10, putting the future of the largest hotel in the Columbus area in question.
With its 253 guest rooms, the hotel at 2480 W. Jonathan Moore Pike represents about 16 percent of the total number of hotel rooms available in Bartholomew County.
But for many, a more significant question is whether the 1,000-person-capacity conference center could close as a result of a nearly $12.4 million court judgment.
If the facility, which features 18 meeting rooms, doesn’t remain open, there could be a significant negative impact on the community’s annual $257 million tourism industry, as well as events hosted by local businesses and organizations, said Columbus Area Visitors Center Executive Director Karen Niverson.
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“We’ll be scrambling to find other suitable meeting and trade show spaces,” Niverson said. “Maybe we’ll have to look at non-convention facilities like the fairgrounds, auditoriums and gymnasiums.”
Although there are comparatively few tourism events during the winter months, Niverson said contracts already are being drawn up for sports events based at the facility for next summer.
‘Wait and see’
As a result of the foreclosure, the property has been acquired by the New York City-based German American Capital Corp. It is a separate business entity from the Jasper, Indiana-based German American Bancorp that operates a bank branch in downtown Columbus.Calls to Indianapolis attorney Louis T. Perry, who represented the New York corporation in the legal proceedings, were not returned.
Niverson said local tourism officials are taking a “wait and see attitude” about the foreclosure.
Besides the local visitor’s center, businesses and local organizations and competing hotels benefit from the Clarion’s large-capacity meeting space.
“We rely on the Clarion to bring in associations and groups,” said Cindy Waddle, who manages properties for the Dora Hotel Co., owned by Tim Dora. “We certainly don’t want to see anything happen that will impact the community in a negative fashion.”
While Dora Hotel Co. manages hotels such as the Comfort Inn, Charwood Suites and Hotel Indigo, it is a separate firm — Columbus Hotel Developers Inc. — that has been managing the Clarion, Waddle said.
The principal owner of Columbus Hotel Developers is Tim Dora’s brother, Michael Dora. It was their father, the late Vincennes restaurant developer Robert Dora, who built the original Holiday Inn in 1963 where the Clarion now stands.
Blame the flood
Circumstances leading to the foreclosure date back to Dec. 17, 2007, when Wells Fargo Bank issued a $12 million loan to Michael Dora’s firm while his property was known as the Holiday Inn Conference Center, court records state.Six months later, the entire facility sustained substantial damage from the June 2008 flood. Several guests were forced to evacuate, and the hotel was closed for several weeks.
The property, which includes 11.5 acres of land, was assessed at a value of $2.75 million on May 10, 2016. That’s down significantly from the $13.6 million value it was assigned in its March 1, 2008, assessment — just three months before the flood.
“They never recovered from that flood,” said Indianapolis attorney James A. Knauer, who represents Columbus Hotel Developers. “The property is not worth $12 million.”
Wells Fargo transferred the loan to German American Capital Corp. on April 1, 2011, according to a summary judgement issued Nov. 4 by Bartholomew Circuit Court Judge Stephen Heimann.
Due to a change in franchise but not in ownership, the Holiday Inn became the Clarion on March 1, 2012.
Nine months after the franchise changed, reports began to surface that Columbus Hotel Developers had fallen behind in its mortgage payments, the summary judgment states.
A complaint to foreclose was originally filed Dec. 20, 2013. Almost a year later, the outstanding principal of the loan was determined to be $10,064,291, the summary judgment states.
But there were a number of delays and continuances, mostly the result of attorney changes by Columbus Hotel Developers, that delayed the outcome in the case, court records state.
The owners were responsible for nearly $70,000 in property taxes in 2016.
When Heimann issued his summary judgment Nov. 4, the judge added interest, attorney fees and late charges to bring the total up to $12,358,862.
A few weeks after the judge approved the foreclosure, German American Capital Corp. requested a sheriff’s sale that currently is scheduled for 10 a.m. Jan. 10 at the Bartholomew County Courthouse.
What happens next
Although he doesn’t anticipate his client taking steps to cancel the sale, Knauer also doesn’t anticipate any bidders during the Jan. 10 sale.“Nobody walks into a sheriff’s sale with $12 million,” said Knauer, a partner with Kroger Gardis and Regas LLP. “What’s going to happen is that German American will own it — and resell it privately.”
But so far, no investors have approached the Visitor’s Center to make normal market inquiries that take place when a commercial buyer is considering such a property, Niverson said.
If the Clarion would close, it could give a false negative impression of the local economy to out-of-town visitors who might see an empty hotel and conference center at one of the main entrances into Columbus, Niverson said.
Since the original motel was built 53 years ago, the facility has been upgraded over the years.
The massive holidome and indoor swimming pool were developed in 1976. After additional expansions and renovations in both 1978 and 1981, the 20,000-square-foot conference center opened in 1989.
A sheriff’s sale of the foreclosed Clarion Hotel and Conference Center is scheduled for Jan. 10, beginning at 10 a.m. at the Bartholomew County Jail, 543 Second Street.