Port under pressure on Riverwalk Inn

Published 3:11 am Wednesday, July 29, 2015

Under pressure to control a rudderless Astoria Riverwalk Inn, the Port of Astoria will likely decide by Friday on a new operator for the Uniontown property.

The Port has terminated the lease held by Brad Smithart of Hospitality Masters and will go to Circuit Court Friday to evict Smithart, who had fallen behind on payments to the Port, the city and county.

At an unusual special session Tuesday night, the Port Commission heard from three potential suitors for the Riverwalk Inn who each indicated they would be capable of taking over, and potentially improving, the unsettled property.

Two of the prospects — Ganesh Sonpatki, a Portland hotelier, and William Orr, a Seattle businessman who grew up in Astoria — pledged to immediately pay off Smithart’s public debts and operate the inn. A new suitor — Mark Hollander, the president of Hollander Hospitality in Bellingham, Wash. — indicated a willingness to satisfy the debts and enter into a short-term operations agreement.

Hollander, whose company has relationships with several prominent hotel brands, said he is interested in bringing a Marriott to Astoria as part of a long-term development project in Uniontown.

Hollander, whose company has Crowne Plaza properties in Portland and Seattle and a Courtyard by Marriott in Tacoma, among others, is the most experienced hotelier among the suitors. He told Port commissioners he would want to be considered the front-runner for a long-term project if he enters a short-term agreement.

Port commissioners held a lengthy executive session after the presentations to discuss their options but made no public announcement Tuesday night.

In an understatement, Jim Knight, the Port’s executive director, had earlier described the Port’s search for a new operator for the Riverwalk Inn as “quite a wild experience.”

“We’ve got to get an operator into this hotel — somebody that the Port can trust — as fast as we can,” Knight told Port commissioners.

While his lease has been terminated, and the Port is desperate to evict him, Smithart and his staff are still operating the hotel. Kruparao Kancharla, whose family had agreed to take over management, backed out after seeing the finances. Among the uncertainties, according to Knight, are an unknown amount of pre-paid coupons for hotel stays that could extend into the six figures.

Rather than entertain competing proposals at public hearings over a period of weeks or months, the Port is left to make a decision by the eviction hearing Friday, a shotgun approach that leaves little time to fully vet the suitors.

Without an operator, the Port could have to run or shut down the hotel, exposing the Port to unforeseen financial and legal liabilities.

Sonpatki, of Param Hotel Group in Portland, and his attorney told Port commissioners that the simplest — and fairest — option would be to turn the hotel over to him on Friday.

Sonpatki had a contract with Smithart to take over the hotel and the Port Commission had agreed in June to assign him the remainder of Smithart’s lease with the understanding he would retire Smithart’s debts. But the terms of the agreement were not finalized and Smithart’s lease has since been terminated.

Sonpatki has assured the Port he is ready to pay off $400,000 worth of debts and operate the hotel immediately. He has said he would operate the inn as a budget hotel.

“I think, just to get down to brass tacks, that there is one operator in the room who checks all the boxes you need,” said Colin Hunter, a Portland attorney for Sonpatki.

Orr, who emerged as a suitor for the Riverwalk Inn last week, and his partners are ready to commit at least $350,000 to satisfy Smithart’s debts and over time invest $2 million toward renovation.

Astoria Hospitality Ventures, which includes Chester Trabucco, the developer behind the Hotel Elliott, is also interested in a former restaurant, coffee shop and lounge as part of a broader marina village redevelopment project in Uniontown.

Orr’s wife, Sara Fulton Orr, is the sister of Port Commissioner Stephen Fulton, who recused himself from the special session Tuesday night because of a potential conflict of interest.

Orr explained that the partnership made a lease and investment proposal to the Port after it became clear that Smithart’s lease was terminated and the hotel was essentially up for grabs.

“We’re ready, willing and able to come in on Friday as well and continue to operate the facility,” Orr told Port commissioners.

Hollander, who had spoken privately with the Port and Smithart and emerged publicly as a suitor over the past few days, said he has been interested in bringing a Marriott to Astoria and has looked at several potential locations.

He had been in talks with Trabucco about a property closer to downtown but, when he learned Trabucco was looking at the Riverwalk Inn for a project, he opted to make a pitch.

Hollander said he has the ability to drop a management team in as soon as Friday, but said the issue is more about whether there is any legal liability to his company or the Port.

He told Port commissioners he could invest anywhere from $1.5 million to $6 million in the Riverwalk Inn property. His interest, though, also extends to developing the 6 acres the Port owns in Uniontown.

“A big part of my interest is to really make sure that what’s done there is done right,” Hollander said. “And I have a track record of being able to do it right.”

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