Formal notice has been sent to the long list of creditors to which Crowne Plaza Hotel owner Zeus Investments LLC owes money. As expected, the company has filed for Chapter 11 bankruptcy.
Troubles for the Houston-based company that transformed the Hotel Acadiana on Pinhook Road into a Crowne Plaza Hotel, the upscale offering of the Holiday Inn chain, have been brewing from the start of the $10 million renovation that began in February 2008.
The project was under way for almost a year without the proper permits required by the city — and the unlicensed contractors who started the job performed subpar work that forced local officials to temporarily shut down the project in February 2009. By the time the cease and desist order was given, the massive renovations had not received a single inspection for plumbing, mechanical and electrical work taking place at the hotel.
Dodging public building inspections is an egregious violation of state and local laws, especially when the inspections are for a hotel that will potentially house hundreds of guests. Read more in this February 2009 ABiz cover story, "Uneasy Lies the Crowne."
The upgrade plans were able to move forward when the company replaced its unlicensed contractors with state-licensed architects, engineers and contractors to finish the work, and the hotel began flying the official Crowne Plaza flag in 2009. But Zeus Investments has since been the target of at least 15 civil lawsuits filed in state district court, all for money owed to various companies that helped with the extensive renovations.
One recent lawsuit, filed Jan. 27 by St. Martin Bank against Zeus Investments, is trying to seize the hotel as collateral for falling behind on a more than $12 million loan. A source close to the bank told The Independent Weekly in early March that five banks are involved in the loan, but it is unclear which banks teamed up and whether they are local. That source also said in early March that Crowne Plaza has been trying to restructure its debts and catch up on its loan payments.
Crowne Plaza General Manager Jeff Keefe did not return a call for comment on the Chapter 11 granted to the company on March 24, but he did offer a prepared statement in early March in response to questions about the company’s financial standing and its ability to make good on its millions of dollars of debt.
In his statement, Keefe cited numerous “challenges” the hotel has faced since the upgrade, including “a longer than anticipated renovation due to contractor fraud, additional hotels being built in the Lafayette market and the direct impact the BP oil spill and drilling moratorium has had on our local economy.”
“The hotel owners have made several changes over the past six months to include hiring a new management company and several key employees, which is having a positive impact on the hotel’s ability to provide superior service,” he said in the statement.
Keefe also noted the reopening of Scandals Nite Club in the hotel, which is expected to open its doors April 13, according to the “Official Scandals Nite Club of Lafayette” Facebook page.
The bankruptcy notice says a creditor meeting for Zeus Investments will be held at 11 a.m. May 10 at the U.S. Bankruptcy Court’s Lafayette office at 214 Jefferson St.
MAY 24 Blogger Robert Mann posts this entry about the Baton Rouge Chamber's recent report on Louisiana's higher education system. It's critical to economic development, and yet our system is facing a "funding crisis" with no way to resolve it, the report says. The Chamber says control of tuition and fees must be returned to the higher ed governing boards.
MAY 24 Here's a NBC33 story about Tyrann Mathieu. He has signed with the Arizona Cardinals, inking a $3 million, four-year deal. He gets a signing bonus of $265K, but gets another, larger bonus if he doesn't get cut from the team for doing drugs. The deal reportedly includes mandatory tests and meetings for the player.
MAY 24 Jarvis DeBerry posts here about the redonkulus rhetoric that would have us believe NOLA is a safe city with a murder problem. Maybe the city's crime stats don't compare with its murder stats because you can't manipulate a murder, he says: a dead body's a dead body. It just doesn't make sense, he says, and his readers agree: a poll asks if they believe the city is safe, and more than 90 percent say no.
MAY 24 Jindal administration officials announced Thursday that the privatization of public health care is going to cost a lot more than they budgeted for, the Advocate reports here. "I'm so surprised," said no one. Anywhere. The cost they're projecting now is more than $1 billion - a lot more than the $626 million budgeted for it. And, it's more than it cost the state to operate those hospitals. So why are we doing this again?
MAY 24 Blogger CB Forgotston ridicules the recent PR campaign by the state GOP in the wake of a legislative auditor's request to both major parties. The GOP (apparently unaware that the Dems got the same request) started yammering about being targeted because it had "killed" a tax increase. CB finds that laughable, but it's also pretty funny that the GOP was comparing this episode to the IRS scandal (Because the President has so much to do with our state auditor. Right?).
MAY 24 Politico details some recent fund-raising efforts by Sen. David Vitter, which have raised the question of his future political plans. This time, it is a $5,000 per head "bayou weekend" that includes "Cajun cooking" and an all-caps "alligator hunt," the story reports. Funds raised go to a super PAC that can spend money to support Vitter in federal or state races, the story points out.
MAY 24 The pink building on Royal in the quarter was sold at a sheriff's sale Thursday, this Picayune story reports. An injunction that would have halted the sale wasn't enforced because the family failed to post a $150,000 bond, the story reports. So the owner of the mortgages on the building bought it, for nearly $7 million. Now the feuding family will have to negotiate with that company to get a lease on the building that has housed their business for close to 60 years.
MAY 23 This post in Louisiana Voice tells us about a bill by a Winnsboro lege that would require all public high school students to take at least one Course Choice online class in order to graduate. (What?) Blogger Tom Aswell says it's a monument to "waste and corruption," especially in light of the problems he's exposed with the program in recent weeks. Idaho had a similar program, but voters removed it by a 2-1 margin, Aswell says.
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