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Archive for Saturday, August 7, 2004

Eldridge Hotel owner opposes auction

Phillips concerned about landmark’s future use

August 7, 2004

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The general manager of the bankrupt Eldridge Hotel said Friday he would fight a court order that the historic property be auctioned to the highest bidder.

Rob Phillips, general manager and majority owner of the hotel at 701 Mass., said he had instructed his attorney to look for ways to contest a decision handed down Wednesday ordering that the property go on the block.

"I'm not resigned to the fact that there is going to be an auction," Phillips said. "I think there's recourse available and I'll probably use whatever legal tools are at our disposal."

Bankruptcy court decisions typically are difficult to overturn, and Phillips did not offer specifics on the legal arguments his attorney would make. Calls made Friday to his attorney were not returned.

The bankruptcy court is expected to set an auction date later this month.

Phillips said he was opposed to the auction, in part, because it could be a step toward discontinuing use of the building as a hotel.

"I think there is a good chance of that," Phillips said. "It would be a sad thing because it is an institution in our community."

He said he had received several offers from investors interested in converting the building to condominiums.

Other people involved in the bankruptcy proceeding said they were optimistic the property would be bought by someone who would continue to use it as a hotel.

"I don't know what the markets are for condos in Lawrence, but my view is the highest and best use for the property is as a hotel," said Mitchell Chaney, a Texas attorney and member of a group that made an unsuccessful $2.3 million offer for the hotel.

Chaney said his group, which includes former Kansas University football great Bobby Douglass, remained interested in the property.

"My intention is to be at the auction and to be a bidder," Chaney said.

Members of a second group -- which includes Chicago residents and KU graduates Steve and Seth Traxler and Lawrence-based Waxman Candles owner Bob Werts -- have said they were interested in bidding on the property and would continue to operate it as a hotel. The group had reached a deal with Phillips to buy the property for $2.5 million, but the court rejected it Wednesday when it ordered the auction.

A third party, represented by Lawrence attorney Chris Masoner, also has expressed an interest in the property. Masoner declined to reveal the identity of his clients, but said they were "definitely interested" in buying the property to use as a hotel.

"All I can say is that we're looking forward to the auction," he said.

The auction probably will be structured to allow anyone to bid on the property. That has members of the Lawrence Preservation Alliance concerned the property may be used as something other than a hotel.

"I think not only the preservation community, but the entire community, would be really sad to see it used another way," said Carol von Tersch, president of the alliance. "It would be a departure from its historic character."

The hotel building is listed on the National Register of Historic Places. The site of the hotel played a prominent role in the "Bleeding Kansas" era of the state.

The original building on the site was the Free State Hotel, built in 1855 by settlers from the New England Emigrant Aid Society, which founded Lawrence. After the hotel was destroyed a year later by pro-slavery forces, Col. Shalor Eldridge rebuilt it.

The building was destroyed a second time in the bloody 1863 raid on Lawrence led by William Quantrill. Eldridge rebuilt it again, naming it for himself. In 1925 that building was torn down and replaced by another, and it was converted to apartments in 1970. Fifteen years later, Phillips organized a group that changed it back to a hotel.

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