City approves contract to sell Hotel Beaumont
The city of Beaumont voted to approve a resolution at a Tuesday, July 29, council meeting authorizing an earnest money contract for the sale of Hotel Beaumont to Garden Street Holdings, LLC, of California for $1.175 million.
According to the City Council agenda, Garden Street Holding will deposit $15,000 as earnest money to Texas Regional Title for a feasibility period of 30 days and will have the right to extend the feasibility period for another 30 days by paying an additional $10,000 in earnest money five days prior to the expiration of the initial feasibility period. The initial $15,000 and the additional $10,000 earnest money will become applicable to the purchase price but non-refundable, the agenda states.
“(Garden Street Holdings) doesn’t own it yet; it’s just under contract,” said Lee Wheeler, the real estate broker hired by the city of Beaumont to handle the property sale. “Just like any other piece of real estate, you put it under contract and agree to all the terms. You have a period of time where the buyer does all their due diligence and whatever else they need to do. Then they’ll close on the deal and start their project.”
Wheeler said once the terms are agreed upon and the sale is finalized, Garden Street Holding plans to revitalize the building and open it as a hotel to the public again.
“They don’t know whether they are going to brand it or leave it unbranded,” Wheeler said. “They have experience doing historical restorations. This is kind of right up their alley and they are really excited about it. I think it is going to be a great thing for the city of Beaumont because we need a hotel downtown really bad. To have one in a historical building like this is obviously a huge plus.”
The city secured ownership of Hotel Beaumont for $1.1 million when no other bids were made at an April auction at Jefferson County Courthouse, said trustee Lance Fox.
“They didn’t pay that ($1.1 million); they just simply offset that against the note,” Fox said. “This was really just a foreclosure of the lien that was granted to the city. They originally financed the project in 1999 to … developer 625 Orleans Limited Partnership that had operated the senior living facility there. They had made a loan through a HUD program — so HUD was involved — but it was from the city to (625 Orleans Limited Partnership). There was a lien that was granted to secure that loan to the city. That’s what was being foreclosed on. The lien had been assigned to HUD, but it was given back to the city. The city bid against the debt that was owed to it.”
It’s not unusual that the only bidder is the lender, Fox said.
“The lender bids against the loan (that is owed),” he said. “That is how the lender acquires ownership and puts it back up for sale.”
Council voted 6-1 in favor of entering into a contract with Garden Street Holding with Audwin Samuel opposing. The Examiner attempted to contact Samuel to find out his reasoning for voting against the contract, but the councilman did not return those calls as of press time.
In a response to the boom following the first Spindletop oil discovery, 277 investors formed the Beaumont Hotel Company in 1919 in order to build a hostelry, according to literature from Beaumont Main Street, a project of the 501(c)3 organization BUILD, Inc. dedicated to the revitalization of Beaumont’s historic Central Business District. One million dollars was spent on the 250-room hotel.
The building hosted two ballrooms, the Rose Room and the Sky Room on the Roof, as well as restaurants including the Black Cat Café and the Kitten.
In 2000, the hotel underwent a $7.5 million restoration by new owners, the National Development Council, Beaumont Main Street literature states. Conrad Schmitt Studios of New Berlin, Wisconsin, completed the decorative paint scheme in the lobby. This restoration utilized historic tax credits, and Hotel Beaumont is listed in the National Register of Historic Places.
According to the city of Beaumont’s website, the building contains 135 units on floors 2-9, two passenger elevators, one freight elevator and three large meeting rooms.