BLAINE - At least one major hotel management firm remains interested in acquiring the Semiahmoo Hotel, and the recent announcement of a Dec. 1, 2012 hotel shutdown may not mean doom for Whatcom County's resort showplace.
Richard Warnick, president and founder of Warnick + Co., confirmed Wednesday, Oct. 31 that he is still in negotiations for possible purchase of the property, although he was reluctant to say much more. Warnick's Phoenix-based firm handles turnarounds for resorts and hotels experiencing financial problems, according to the company's website.
Warnick's interest in the property was revealed in August, 2012, in legal documents filed as a part of the bankruptcy reorganization of Bellingham developer David Syre, who launched the Semiahmoo development in the 1980s. Syre's Trillium Corp. still has a partial ownership interest in the hotel, although the Upper Skagit Tribe is majority owner.
Warnick said nothing has changed since then, and his company could still wind up acquiring the hotel. But he stressed that there are no guarantees.
A deal may not be complete before the Dec. 1 closing date announced Tuesday, Oct. 30 by the present ownership group, Warnick said. That means the hotel may be closed for some period of time. Warnick said his firm played no role in the current ownership group's decision to announce the Dec. 1 closure and the potential loss of 224 jobs at Blaine's largest employer.
Mike Kent, a Whatcom County real estate agent, has helped arrange sales of several large pieces of distressed real estate in the Blaine and Birch Bay area in the past couple of years. Kent said he has seen a lot of investor interest in the hotel property, and he thinks its future could be bright.
"I think this (closure) might move closer to new ownership," Kent said. "A year from now we may be looking at a revitalized new product with new ownership, with capital to make it a success."
Kent also observed that any new owner would likely need millions to invest in upgrades, after making the multi-million-dollar purchase.
In spring 2011, Lisa Marechal and Peter Houseknecht of Neo Design Studio surveyed the hotel and grounds and came up with a long list of needed repairs and upgrades, but none of the problems were major.
"It appears that it has been maintained and kept in good condition over the years, but is beginning to show signs that the maintenance is falling behind," the Neo Design Studio report stated. "Given the location of Semiahmoo, this (resort) is worthy of further investment and improvements to realize the potential."
Marechal said her firm, with offices in Portland and Vancouver B.C., prepared the 2011 report for "a broker who was dealing with a confidential interested party."
Loni Rahm, president and CEO of Bellingham Whatcom County Tourism, said Semiahmoo Hotel is an important part of the county's infrastructure in attracting business conferences here.
"I certainly hope that the closure is temporary and new owners would find a way to reopen it sooner rather than later," Rahm said.
Besides its 200 high-end guest rooms, Semiahmoo also provides about one third of the county's available conference space.
"The longer it stays closed, the more people we will have displaced" to conference locations outside the county, Rahm said.
Overall, she said, tourism and convention business in Whatcom County has been on the rebound, and she hopes that fact will encourage potential new owners.
"I would think that a potential buyer would see the advantage of opening it as quickly as possible," Rahm said.
In announcing the Dec. 1 shutdown, a press release from Semiahmoo Resort Co. LLC acknowledged that the financial condition of Trillium Corp. and the bankruptcy of Syre, Trillium's founder and owner, "has complicated the financial condition" of the resort company.
Syre filed for a Chapter 11 bankruptcy reorganization in December, 2011, seeking time to sell some of his assets to pay his creditors. One of those creditors is Washington Federal.
In filings in U.S. Bankruptcy Court in Seattle, Washington Federal attorneys contend that Syre had personally guaranteed about $15.5 million in loans and related expenses to the hotel company. Now-defunct Horizon Bank made those loans. The money is now owed to Washington Federal because that bank took over Horizon's loan portfolio after bank regulators shut Horizon down in 2010.
Syre pledged his share of the hotel property as part of the collateral for the loans, and the bankruptcy court recently recognized the validity of the bank's claim on at least a portion of proceeds from any hotel sale.
Neither Trillium nor Washington Federal had any immediate response to requests for comment.
The hotel has survived financial crisis before.
In 1986 - the year before its opening - financial and legal woes caused a nine-month shutdown of construction work on the hotel. In 1993, the parent company, Atlas Hotels, defaulted on $30 million in loans and lost Semiahmoo through foreclosure. But the hotel stayed in full operation through that episode and other ownership shuffles, including Trillium's sale of majority ownership to the Upper Skagits in 2003.
Tribal representative Harry Chesnin said the hotel's situation will have no effect on the adjacent marina, which is not owned or operated by the hotel. Many boaters who moor there own a slip in a condominium-style arrangement.
Semiahmoo Resort Co. also plans to keep the two nearby golf courses-Semiahmoo Golf & Country Club and Loomis Trail Golf Club-in operation.