The financially troubled Eldridge Hotel will be sold to a group that includes two Chicago-based Kansas University alumni and a prominent downtown Lawrence businessman.
701 LLC said Tuesday it would pay $2.5 million to buy the building and pay off the numerous creditors who forced the historic downtown hotel, 701 Mass., into bankruptcy. The handover from current majority owner Rob Phillips could come within 90 days, as soon as a bankruptcy judge approves the deal.
"I think this is a very positive project -- it's a beautiful hotel, and it has a great history," said Steve Traxler, a Chicago theatrical producer who attended KU in the mid-1980s. "Our group has a great interest in the hotel and wants to preserve it."
Monday's announcement came a week after Phillips said he had rejected a $2.3 million offer from a group that included former KU All-American quarterback Bobby Douglass.
$2 million debt
Phillips said he walked away from that proposal because it included only $50,000 to pay unsecured creditors. The latest bankruptcy court filings show the hotel owed $171,000 in unsecured claims, in addition to $1.9 million in secured debts and $78,000 in priority tax obligations.
701 LLC, Phillips said, agreed to pay off all the outstanding debts.
"Everything's going to be taken care of with the creditors," he said. "These people want to do that."
Said Traxler: "We felt it was important to restore the credibility of the hotel."
Among the partners in the new ownership group: Bob Werts, owner of Waxman Candles, which is a block north of the hotel. He already is partners with Traxler in a Chicago outlet of Waxman.
"It's not going to be a quick fix," Werts said of efforts to restore the Eldridge. "It's established and up-and-running, it's doing business, and we are going to continue that. The longevity of redoing the hotel will take some time."
Other partners include Traxler's brother Seth, a former Eldridge employee who is now a Chicago lawyer, and Dion Antic, a Chicago nightclub operator.
Planning in early stages
The new group said it would invest $1 million to renovate the lobby, guest rooms, restaurant and bar area at the hotel. They also plan to install a new elevator, signs and awnings.
Phillips has long complained that a lack of parking hindered business. Steve Traxler said he was negotiating with "various entities" about solutions to the problem and will approach City Hall.
Other plans to revitalize the hotel are still in the early stages, he said, but new entertainment options will be part of the mix.
|Partners in the new ownership group for the Eldridge Hotel:¢ Steve Traxler, president of Chicago's Jam Theatricals, which specializes in producing Broadway tours. He attended Kansas University from 1984 to 1988, and he co-owns the Chicago outlet of Lawrence-based Waxman Candles.¢ Seth Traxler, Steve's brother, a partner in the Chicago law firm of Kirkland & Ellis, attended KU from 1989 to 1993. He worked at the Eldridge Hotel for two years, as a bellman and front desk manager.¢ Bob Werts, founder of Waxman Candles, 609 Mass.¢ Dion Antic, described by one publication as a "Chicago nightlife impresario," operates four nightclubs there, including Iggy's and Harry's Velvet Room. He's a partner with Steve Traxler in Kansas City's Velvet Dog supper club.|
"We're going to focus on the areas of marketing the hotel," Traxler said. "Food and beverage will be one of the priorities."
The new owners will be "repositioning the hotel in a fresh way," he said. "It's not going to be a dramatic change -- the Eldridge has so much history, and it's still a historic hotel."
The original building at Seventh and Massachusetts streets was called the Free State Hotel, built in 1855 by settlers from the New England Emigrant Aid Society, which founded Lawrence.
In 1856, the Free State was destroyed by a group of pro-slavery forces. It was rebuilt by Col. Shalor Eldridge and stood until 1863, when it was attacked and destroyed again, this time by William Quantrill and his raiders.
Eldridge promptly rebuilt the hotel, renaming it The Hotel Eldridge.
By 1925, the hotel had deteriorated. A group of Lawrence business leaders was organized to tear down and rebuild the Eldridge, with community backing.
With luxury hotels giving way to motor inns, the Eldridge closed its doors as a hotel July 1, 1970, and was converted to apartments.
Hotel's rebirth, slow death
In 1985, Phillips organized a group to rekindle the historic structure as a hotel. The city committed $2 million in industrial revenue bonds to match a $1 million private investment. But the Eldridge has struggled and filed for bankruptcy protection late last year after a lender began foreclosure proceedings.
Traxler said he and his brother approached Phillips two years ago about buying the hotel.
"The timing wasn't right at the time," Traxler said. "So we retreated."
The new ownership group came together in just the past few weeks, he said, when it became apparent the Douglass group would fail in its attempt to buy the hotel.
"It all happened very quickly," Traxler said.
Under the agreement, Phillips will remain with the Eldridge for three years as a consultant. His salary for that position has not been determined.
Traxler said the new owners would revitalize the hotel.
"There's a lot of exciting things happening in downtown Lawrence, a lot of exciting establishments," Traxler said. "We hope the Eldridge Hotel can be part of that."