One year later, city property sits empty
When owners of Hotel Beaumont announced its impending closure in August 2011, there was plenty of concern regarding the historic building’s future. First, the roughly 50 tenants staying at the senior housing facility had to find alternate homes, and 27 employees had to find alternate jobs. Then, everyone with a stake in the revitalization of downtown Beaumont was left to contemplate what would become of the 90-year-old landmark, hoping that demolition wasn’t in the cards.A year later the building hasn’t been demolished, thanks at least in part to the city of Beaumont ponying up the $827,419 needed to keep the property out of foreclosure, effectively taking possession of the building.
The city is now the sole, outright owner, according to Beaumont Community Development director Chris Boone, but Hotel Beaumont’s fate has yet to be determined.
The 250-room Hotel Beaumont, built in 1922 Beaux-Arts style, towers over downtown’s Orleans Street boasting a view of the city, two ballrooms, antique furnishings — and zero inhabitants since Halloween 2011. Boone said when the city first heard that the building’s owners were closing Hotel Beaumont, he was unaware the property was going to foreclosure. In the weeks subsequent to the announcement, Boone would learn better, and Beaumont City Council ultimately decided in February 2012 that the city would front the costs to keep Hotel Beaumont “in house.”
“We’ve invested a lot in downtown; the community has invested a lot in downtown,” Boone said. “We couldn’t lose all that we’ve put into it.”
While Boone was talking in general about blood, sweat and tears, he could have just as easily meant money since the city of Beaumont has paid about $4 million for Hotel Beaumont so far. Aside from the $827,419 paid to first lien holder Capital One Bank to keep Hotel Beaumont from foreclosure, the city also gave its owners – 625 Orleans Partnership, a faction of the National Development Council out of New York – $2 million in loans and $1.175 million in grants to facilitate a 2000 facelift.
The National Development Council’s Web site says it has “loaned more than $80 million to small businesses for projects with total investments of $130 million, invested nearly $320 million in equity for affordable housing or historic preservation projects (leveraging an additional $280 million), financed and developed nearly $1.1 billion in public facilities, (and) financed New Markets Tax Credit projects totaling $360 million,” but the city of Beaumont never received any payment on the decade-old $2 million loan, and a loan owners secured from the bank was in default when the city of Beaumont stepped in and bought the building. Boone said he couldn’t say for certain why the city never filed suit against Hotel Beaumont’s owners for defaulting on the loan, but he did have a pretty good idea.
“Because it was this partnership, there seemed to be no assets to go after,” Boone said. “Essentially, there was nothing for us to get even if we did go after them for the money.”
The 625 Orleans Partnership was owned by the National Development Council and had no assets of its own.
“Typically, if you’re not getting paid, you foreclose, which is what happened here with he bank. Whether (the city) had the ability to foreclose, I wouldn’t want to second guess.”
How, and for how much, the city acquired Hotel Beaumont notwithstanding, Boone said the property is a gem.
“It’s a very solid building,” he said. “It’s unfortunate it closed, but it is a wonderful restoration to hold up for 10 years.”
Boone said city attorneys are in the process of drafting an RFP (Request For Proposal) that he foresees being complete “in the very near future.” According to the community development director, getting Hotel Beaumont back on the tax rolls is a priority. As Boone told the Beaumont Business Journal in 2011, “We’re in the business of redeveloping downtown. Our concern is that the longer (Hotel Beaumont) stays empty, the more difficult it will be to get the building back online.”That’s the motto Boone is operating under even to this day. “The plan right now is to move forward with selling it as soon as possible,” he said. “Obviously, it’s a big project. We’ve had interest in the building but I’m not aware of any formal offer. That will all have to come after the RFP.”
In the meantime, the city is still racking up utility bills for the project, but Boone’s efforts are geared toward ending that state of affairs.“We want to keep it climate-controlled so that it’s in the best possible position to sell,” he said. “We really want to get this into the private sector and back to good use.”