A lender has seized the Baton Rouge Marriott at 5500 Hilton Ave. and will auction off the property to pay off a $38.8 million debt.
The seizure and sale order, signed by 19th Judicial District Court Judge William Morvant, says Columbia Properties Baton Rouge Ltd. owed $32.8 million as of May 1 on a $36.5 million promissory note signed in 2005. The interest and other fees owed to CCMS 2005-CD1 Lodging, a trust, brought the total debt to close to $39 million.
Columbia Properties bought the hotel in late 2000 from Massachusetts Mutual Life Insurance Co. for $20.6 million.
Columbia switched the 300-room hotel’s flag to Marriott from Hilton. The hotel, located along the interstate near College Drive and Corporate Boulevard, has been in business since 1976.
Calls to officials with the hotel and Columbia Properties for comment were not returned.
Randy McCaslin, vice president/practice leader for PKF Consulting in Houston, said he doesn’t know what happened with the Marriott. But a lot of hotels got into trouble during the recession, when the lack of guests led to cuts in room rates.
Some hotels were no longer able to set aside the 4 percent or 5 percent of revenue that normally went into reserve funds used for upkeep, he said.
Some hotels had to use that money for debt service and to pay workers. When the recession ended and people began traveling again, the hotels found themselves behind on maintenance and under pressure from their brands to upgrade facilities.
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