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Archive for Thursday, September 16, 2004

Eldridge Hotel auction set

Opening price for landmark expected to be $1.9M

September 16, 2004

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— An auction for downtown Lawrence's historic Eldridge Hotel will be Oct. 12, a bankruptcy judge ruled Wednesday.

Judge Robert Berger scheduled the auction for 10 a.m. at the federal courthouse in Kansas City, Kan. It is expected to draw several bidders including a group led by Lawrence developer Doug Compton.

Compton confirmed Wednesday he was part of a group that includes Lawrence developer Bill Newsome and Stephen Craig, president of Lawrence-based Linquist & Craig Hotels & Resorts.

"I think it is a good piece of downtown history/real estate," Compton said. "I'm always interested in good, sound investments in downtown, and I think this one is about as good as it gets."

The Eldridge Hotel filed for bankruptcy protection in December and was ordered earlier this year to be sold at auction to pay off debts of about $2.1 million.

Other bidders

Two other groups previously announced their intentions to bid on the hotel. They are:

  • A group including Kansas University football great Bobby Douglass and Texas attorney and KU alumnus Mitchell Chaney.
  • A partnership that includes brothers Steve and Seth Traxler, both are KU graduates and Chicago residents, and Bob Werts, an owner of Waxman Candles.

The auction may attract other bidders, said Thomas Mullinix, an attorney representing the Eldridge. He said he had been contacted by a party in Minnesota that was interested. Mullinix said he would publish an ad in next week's Wall Street Journal to notify other potential bidders.

"We want people there with paddles in their hands, waving wildly," he said.

The auction will be open to bidders who can meet basic requirements:

  • Must present $100,000 in good-faith money to receive a bidding number.
  • Must have a letter of credit showing they have financial means to at least meet the expected $1.9 million opening bid.
  • Must sign a document saying their current intent is to operate the building as a hotel, although the judge admitted that it would not stop the buyer from changing its use in the future.

The auction will be open to the public to observe, although attorneys for the Eldridge and the group that includes Douglass had argued to allow only bidders. The attorneys argued the event could attract a crowd that could be disruptive to the process.

Berger, though, said he thought that possibility was remote.

"When we're selling a building that has as much public exposure and history as the Eldridge Hotel, I think it is important that it not be done behind closed doors," the judge said. "There could be a perception that this is a good-old boy process and that is not the case."

Compton's announcement

The announcement by Compton ends weeks of speculation about who Lawrence attorney Chris Masoner was representing during the hotel's bankruptcy hearings.

Compton, whose First Management owns a variety of apartments and commercial properties in the area, said he thought the hotel market in Lawrence would continue to improve as interest grows in Kansas University football and other athletics, in addition to opportunities generated by events at the nearby Kansas Speedway.

But Compton said the building's past -- which landed it on the National Register of Historic Places for its role in Kansas' Free State movement -- was a driving factor.

"I would say that is a very big part of my interest," Compton said. "My portfolio doesn't include hotels, so it had a lot to do with the history and importance of that building."

Compton said his group would be well positioned to run the business as a hotel because of Craig, whose 35-year-old company operates seven hotels in California, Kansas and Alabama.

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