St. James Hotel deal has not closed yet

Published 10:07 pm Friday, September 1, 2017

City leaders are still awaiting the sale of the historic St. James Hotel on Water Avenue to close.

The deal with hotelFUBU for $400,000 was expected to be finalized by the end August, but Selma Mayor Darrio Melton said Thursday he is hoping it closes within the next two weeks.

“It is our hope that it will be done before the next council meeting,” Melton said. “It’s our hope that we’ll be able to share that news before then or on that date.”

The Selma City Council will meet on Tuesday, Sept. 12, and Melton is hoping everything will be finalized by then.

The mayor signed an agreement to sell the hotel to Erudite Holdings LLC, parent company of hotelFUBU, in early June. Melton said the ball is in hotelFUBU’s court to finalize the deal.

“We’re waiting on them to come back to the table with us with the financials for that project. From our end, we have signed off to move forward with the selling of the hotel,” Melton said.

The deal was supposed to be finalized at the end of July, but Ollie Davison, chief of staff, said FUBU asked for more time to seek more funding because renovations were going to cost more than expected.

HotelFUBU made an offer to purchase the St. James in January for $400,000 and committed to spending $3 million in renovations. The details of the contract were finalized in June after the Selma City Council voted to approve the agreement.

The hotel has been closed since sometime in July when hotelFUBU asked the city to close it so they could have estimates done for renovations without guests being in the hotel. The city has been paying for 24-hour security until the sale is completed, but FUBU has pledged to reimburse the city for the cost.

The city initially started discussing selling the St. James in March 2015 when Strand Development, the company that managed the hotel, decided to terminate its contract with the city. The city then started operating the hotel while spending an estimated $25,000 each month.

The city has been in talks with several buyers over the last few years, but none of them ever panned out.

The closest the city got to selling the St. James was when the council voted in August 2016 to sell the hotel to Janee Hotel Corporation for $100,000, just a fraction of the hotel’s appraised value of $900,000.

The deal fell apart after details of the company’s president’s, Kenneth Moore, past came to light. Moore filed a lawsuit against the city in December 2016, alleging the city breached a contract when the hotel was relisted with an Atlanta realtor.

The law suit was settled in July for $30,000 and dismissed.

Melton has said in the past that the sale of the St. James is a key part of redeveloping downtown Selma.