Council votes to list St. James hotel
Published 10:27 pm Thursday, August 4, 2016
The Selma City Council voted to list the St. James Hotel with a real estate company out of Atlanta during a special meeting Wednesday.
Between now and finalizing that paperwork, the city also has an offer of $100,000 cash from an Illinois developer.
After learning the city planned to list the hotel, Janee Hotel Corporation president Kenneth Moore made the offer, according to Councilwoman Susan Keith.
Moore has been to multiple council meetings over the last couple of months and initially made an offer to buy the hotel over six years for $500,000 with tax incentives. He also wanted the city to retain a partial ownership of the hotel through those six years.
Keith said Moore has the financial backing to put $4.5 million of renovations and expansions into the historic landmark.
According to Moore, his company has bought, renovated and sold more than 17 branded hotels since 2009 and currently owns seven hotels across the country, including a Four Points by Sheraton, two LaQuinta Inn and Suites and a Best Western Premier.
If the council doesn’t vote on the proposal from Moore, the hotel is going to be listed with Hotel Assets Group.
The council discussed the real estate’s company fee of $70,000 Wednesday but ultimately decided to proceed with the listing.
The company initially asked for $75,000 but came down $5,000 after the city countered with a commission of 5 percent. The new fee is 7.77 percent of the hotel’s appraised value of $900,000.
“[The agent] said that $70,000 was the lowest that her firm would be willing to go on the fee,” Keith said.
Some council members said if the city is going to pay $70,000 to a realtor than there needs to be a minimum selling price.
“We should not let them dip below a certain price. We should give them a window to sell between,” said Councilman Greg Bjelke. “We can’t pay $70,000 and sell it for $500. What is the bottom price we would take for it?”
Councilman Cecil Williamson said the difference between $70,000 and 5 percent of the hotel’s appraised value is about $25,000, which is the same amount the city has spent to keep the hotel running each month.
“If we keep this thing open … even two months, it’s going to cost more than $25,000,” Williamson said. “Unless there is a better option, I want to list it and try to start selling it.”
Keith has also been in touch with Hans Detlefsen, who did an appraisal of the hotel back in May. Keith said Detlefsen told her that to think the hotel would sell in a month is “laughable” and that the city “might start to have some nibbles” in three to four months.
“The hotel business is not exactly booming right now,” Keith said. “People aren’t clambering to come into a distressed town and buy a distressed hotel.”
The city is currently spending an average of $25,000 a month to keep the hotel open, but Mayor George Evans is expected to present a plan Tuesday to cut the hotel’s staff to “bare bones.”
The council also discussed why the city listed the hotel with an out-of-town realtor. Keith said the company that will get the listing does nothing but market hotels.
“Local people, why they may have outlets to the national markets, they don’t typically market [hotels.] This company and what we were looking for is a company that all they do is broker hotels to people who typically work under a flag,” Keith said. “We didn’t have anyone in Selma, or actually anyone in Alabama, who does that.”