Big changes for Michigan Ave. hospitality market
By J. PATRICK PEPPER
DEARBORN — The seismic restructuring of the local hotel market continued last week with the announcement that one property is under contract to change hands and another one already has changed brands.
The distressed Hyatt Regency-Dearborn, which has been operating under receivership since last year, is under contract to be sold for $20 million to an unidentified buyer, according to the broker who handled the deal.
Rick George of Chicago-based HREC Investment Advisors said in published reports that the new owners will keep the hotel open as a Hyatt, and that the sale should close by December. The final sale price actually will be $12.5 million due to undisclosed structural issues that will be addressed by the new owners, George said.
Built in 1976, the 772-room hotel last was sold in 2007 for $40 million to Dallas-based real estate investment group Ashford Hospitality Trust. Ashford defaulted on a $32.5 million mortgage for the property in December.
The HREC listing for the hotel estimated it would cost $155 million to rebuild it today from scratch. One of the selling points cited in the listing is the partial financing that is secured for a city-built convention center near the hotel. City officials previously said they hoped to work with the new owner, whoever it was, toward a management agreement for the proposed meeting center.
George did not return a telephone call seeking comment for this story before press time.
Across Michigan Avenue at the former Hampton Inn, new signage has been installed denoting the hotel as the Dearborn West Village Inn. Hampton Inn corporate parent Hilton Worldwide did not renew the property owners’ franchise because the owners declined participation in a brandwide capital improvement program.
But Michigan Avenue may not be without a Hampton Inn for long.
Southfield-based real estate development company Investico Development Co. has plans to build one at the southwest corner of Telegraph and Michigan and demolition contractors recently finished razing the two buildings that formerly occupied the 4.57 acre site, a movie Showcase Cinema movie theater and Wendy’s fast food restaurant.
Investico also is behind the nearly completed Holiday Inn Express a quarter-mile west on Michigan Avenue. The 100-room hotel, which officially will be known as the Holiday Inn Express & Suites Dearborn West, is accepting reservations for arrivals after Nov. 7, according to an announcement posted last week on the company’s Website.