MINNEAPOLIS — It's been a staple on the corner of South 10th Street and Marquette in downtown Minneapolis since 1992.
"It's our biggest hotel, its really our convention center flagship hotel," said Downtown Council President and CEO Steve Cramer.
But the 821-room Hilton Minneapolis Hotel, which is the largest hotel in the state, could become a thing of the past once it hits the auction market next month.
"It's the ownership and the level of debt that's the issue here," said Cramer.
Since 2016, the hotel has been under the ownership of Florida-based Haberhill LLC and Chicago's Walton Street Capital, which currently owes more than $200 million in debt on the property, now in foreclosure.
"What we're seeing generally is a lot of shakeout in the commercial real estate market you know hotels, office buildings as a result of this economic disruption that we've seen over the last couple of years," explained Cramer.
Which hasn't kept people from booking hotels. According to the Minneapolis-St. Paul Regional Economic Development Partnership, hotel occupancy was still 10-25% below 2019 levels in 2021, but continues to rise in 2022.
Leaders with Hospitality Minnesota say it's not unusual to see changes in hotel ownership during these challenging economic times and while change is inevitable, they say momentum is growing with new opportunities within the industry.
Liz Rammer, President and CEO of Hospitality MN sent KARE 11 the following statement:
"In the best of economic times, changes in hotel ownership are not unusual. Given the devastation leveled on the hospitality industry due to the pandemic, it is unsurprising that there is additional hotel ownership churn. Properties change hands in a variety of ways, some of them very public. As the STR data for October 2022 shows, Minneapolis continues to see significant improvement compared to 2021 in both occupancy rate and RevPAR (Revenue per Available Room). Other positive momentum includes new hotel properties opening this year including Minnesota’s first five-star hotel. Downtown hospitality businesses are projecting a robust holiday season, which will bolster ongoing recovery efforts."
While the future of the property remains uncertain, a hotel spokesperson says:
"Hilton continues to operate the property under its management agreement. Following a series of guest enhancements made throughout the year, we remain fully committed to welcoming guests and hosting events with the quality service and hospitality experience they have come to enjoy.”
"Its occupancy has been going up, it's going to continue to go up based on the increased number of conventions and business travel and leisure travel that we're seeing throughout this year and no doubt will continue into next year," said Cramer.
We reached out to Haberhill who didn't want to comment.
The hotel will be auctioned off to the best cash offer Friday, Jan. 13, 2023 at 10 a.m. at the Hennepin County Sheriff's Office in downtown Minneapolis.
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