Clients who have done business with Columbus’ largest hotel are being notified to start making alternate plans.

Clarion Hotel and Conference Center, 2480 W. Jonathan Moore Pike, is scheduled to be sold in a foreclosure auction 10 a.m. July 11 at the Bartholomew County Sheriff’s Department, 543 Second St.

Clarion officials informed the Columbus Area Visitors Center on June 2 that rental rooms would not be available at the Columbus hotel after July 10, executive director Karen Niverson said.

Her office immediately began working to help people find other lodging accommodations outside Bartholomew County for later this summer, Niverson said.

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The Clarion had been expected to provide guest rooms for several large events coming to central Indiana during the next month.

For example, Columbus will host the Great Lakes Nationals softball tournament July 19 to 23, and some of them were registered at the Clarion. Guest rooms at the Clarion had also been booked for the United Pentecostal Church International Convention, which is July 25 to 28 in Indianapolis, local tourism officials said.

Business-event customers such as The Republic, which hosts a bridal show each January at the Clarion, have also been contacted by the hotel.

“I regret to inform you that the hotel is being sold at a sheriff sale on July 11th,” Clarion’s director of catering, Stephanie Schrougham, wrote in a June 7 email. “We have been instructed to cancel all events after that date.”

The hotel’s conference center — with a 1,000-person capacity — has hosted the community’s largest indoor gatherings, including business conferences, not-for-profit fundraisers and wedding receptions. The hotel typically has booked events up to a year in advance, and has 253 guest rooms.

Clarion hotel manager Amy Moses has not returned messages over the past week seeking information on the hotel’s recent notifications to customers.

An Indianapolis attorney representing German American Capital Corp., which holds the hotel’s mortgage, also has not returned messages seeking comment on plans for the hotel.

Michael Dora, whose father Robert built the hotel in 1963 as a Holiday Inn and who is owner of Columbus Hotel Developers, said he has not been involved in running of the Clarion since April 2016, and has had no formal contact with its current management for more than a year.

What’s at stake

Visitor spending brings in $257 million annually into the Columbus area economy, Niverson said.If the west-side hotel were to close, “there will be certain events we just won’t be able to accommodate,” the visitors center director said.

“We’ll adapt,” said Cindy Frey, president of the Columbus Area Chamber of Commerce. “But as our community grows, we will need places for 700 to 1,000 people to gather for a variety of purposes — not 500 or less.”

Without a large hotel and conference center in Columbus, “we will largely be recycling money already in this county,” said Tim Dora, brother of Michael Dora, who manages Dora Hotel Company.

Tim Dora’s company operates Hotel Indigo, Comfort Inn and Charwood Suites in Columbus.

“But when we bring in a group that spends three or four days at the convention center, that’s all new money. The multiplier effect is huge,” Tim Dora said.

When Columbus Hotel Developers Inc. refinanced the Clarion’s loan with Wells Fargo in late 2007, plans had been drawn up to demolish older rooms and replace them with towers, Michael Dora said.

But the flood of June 2008 hit just as the business was about to begin its busiest time of the year — changing the plans, he said.

Even before the flood, however, the hotel was facing some financial struggles, Michael Dora said.

“In 2007, we paid $459,044 in property tax, which is about $1,800 per room,” he said. “I guarantee you there was no other hotel in Columbus paying that much per room.”

After the flood, the hotel was closed for eight days. It took a couple of months to get 77 first-floor rooms and the restaurant operational, Michael Dora said.

The banquet room was off-limits to the public for a half year, he said.

“We had flood insurance, but the government wouldn’t let you have any more than $1 million,” Michael Dora said. “The damage ran about twice that.”

The value of the hotel property, assessed at $13.6 million just prior to the flood, quickly dropped — and most recently was assessed at $2.7 million on March 15 of this year, according to county tax records.

Wells Fargo sold the Columbus Hotel Developers Inc. loan in a bundled package to German American Capital Corp. of New York City — a separate business entity from the Jasper, Indiana-based German American Bancorp, which operates local banks including one in Columbus.

“German American came in and tied my hands,” Michael Dora said. “I couldn’t do improvements, repairs — anything.”

In November, a Bartholomew County judge ruled that Columbus Hotel Developers Inc. was in default on its debt and owed nearly $12.4 million.

A foreclosure sale was initially scheduled for Jan. 10, but was canceled.

Tim Dora said he doesn’t expect the Clarion to be pulled off the July 11 sale a second time.

“My instinct is that it will sell — and it will probably be for an alternative use,” he said.

What's next

Clarion Hotel and Conference Center, 2480 W. Jonathan Moore Pike, is scheduled to be sold in a foreclosure auction 10 a.m. July 11 at the Bartholomew County Sheriff’s Department, 543 Second St.

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Mark Webber is a reporter for The Republic. He can be reached at mwebber@therepublic.com or 812-379-5636.