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The Hilltop House Hotel will remain open, at least for now.
Owner Ron Selvage said Saturday that he has a buyer for the hotel, which has been in foreclosure proceedings with the Los Alamos National Bank.
Selvage would not reveal the name of the buyer or the purchase price and the transaction is contingent upon a number of factors. Selvage, though, did say that the papers were signed Friday night.
The deal is contingent upon bank approval, an appraisal and a two-thirds vote of agreement from the investors’ group.
“I am confident the deal will go through,” Selvage said. “It’s going to be on a fast track and I am hopeful we can get it done in a month.”
Back in September 2005, managing partner Ron Selvage and Hilltop House LLC took out a mortgage of $4.8 million. Selvage had the backing of a team of local investors, who pooled their funds and came up with $600,000.
When asked if the investors would get their money back, Selvage said, “unfortunately, no.”
Selvage and his wife Kim Selvage are personally on the hook for the mortgage and Selvage said negotiations are ongoing for the balance of the loan if the sale is approved.
If the deal falls through, the hotel will be auctioned off to the highest bidder at 11:45 a.m. on March 6 on the steps of the Los Alamos Justice Center.
According to a legal advertisements that have appeared in the Los Alamos Monitor, Judge Sarah Singleton of the First Judicial District Court of Los Alamos ruled earlier this week that the special master will sell the hotel at public auction for cash or certified funds.
The legal notice indicates the total amount awarded by the judgment to LANB with interest to the date of the sale is $4,531,155.69 plus additional costs and attorney fees. The amount of interest alone to date is $521,785.36.
The Los Alamos National Bank put the wheels in motion to foreclose on the company that owns and manages the Hilltop House Hotel back in October.
Hotel owners Ron and Kim Selvage along with the hotel’s investors were hopeful that a deal could be struck with the bank to restructure the debt.
But that was not to be.
The landmark 79-room hotel straddles some of the most high profile commercial property in Los Alamos at the convergence of Trinity and Central Avenue. But the overall economy and increased competition — both on and off the Hill — has left the 40-year-old lodge struggling for survival.
The foreclosure documents were filed in First Judicial District court in Los Alamos County by LANB attorney James R. Jurgens.
Selvage said the hotel’s financial troubles can be traced to the economic downturn as well as a dwindling number of subcontractors working at the lab. Selvage also said it did not help that the Holiday Inn Express opened for business just down the road in 2010.
According to the filing, Hilltop executed and delivered a promissory note to LANB in the original principal amount of $4,288,55,43 with interest and this was called the “60 Note.”
Hilltop, however, failed to make payments due on the 60 Note when it came due and on Sept. 25, 2012, LANB made a demand on Hilltop to cure the default under the 60 Note by Oct. 5. Selvage said the mortgage payment was $26,000 per month. According to the complaint, Hilltop failed to cure the default.
Selvage, a former county councilor who also works at Los Alamos National Laboratory said in November, “I personally guaranteed the $4 million loan to the bank. And Kim and I are on the hook for that.
“If we don’t get a deal with the bank, the investors will lose just their initial investment. I could lose millions of dollars depending on what happens. I desperately want the hotel to succeed.”
The Hilltop House lost its Best Western designation in June because it did not meet the franchise’s standards.
And general manager Denise Smith left her job at the hotel in November.
In the meantime, the hotel has remained open as well as the restaurant and gas station. Selvage has acted as general manager and he gave credit to his employees.
“They have done a great job through all of this,” Selvage said.