Royal OakJuly 9, 2012
Travelodge saved by new owners with plans for redevelopment
By Chris Jackett
C & G Staff Writer
ROYAL OAK — At risk of losing its business license as recently as earlier this month, a local Travelodge hotel could have a bright future down the road.
A group of partners consisting largely of Southfield-based Ari-El Enterprises Inc. and Birmingham-based The Elia Group have purchased the hotel at 30776 Woodward Ave., locally branded as Sagamore Motor Lodge, and is looking to redevelop it next year.
Although under new ownership, it is still being operated by former owner Michele Saranchev under her business license until the new owners can secure a license of their own.
“The previous owner is operating the hotel for us,” said Zaid Elia, president of The Elia Group. “We were under the impression that — she’s operating the hotel, she’s been operating it for a while — we’d leave the status quo until we come before this commission with our redevelopment plans.”
Elia said the group of partners planned to operate the hotel as is for about a year before further developing the location. But they have already indicated their ideas and hopes to have more of a formal presentation next month.
“There are long-range plans for the site,” City Attorney David Gillam told the City Commission July 2. “They’re interested in operating, possibly under a status quo basis under their own license, for a period of approximately a year, after which time they hope to be in the position to move forward with a development of the existing hotel that’s on the site and rebuild (as) an upscale, possibly four- or five-story establishment that would be designed to serve primarily the Beaumont Hospital medical community, but obviously anyone else that was interested in staying at or using the facility.”
The Travelodge location previously had a history of unpaid bills to the city. Property taxes, personal taxes and water bills totaling about $142,000 went unpaid for more than a year until June 14 when the payments came trickling in, knocking the debt down to $500 as of June 25 and being fully paid off as of press time.
“I just want to state for the record that we were completely unaware of any of these issues until after we closed,” Elia told the City Commission. “We put some money in escrow to pay all the fees with the intention of the title company paying the city direct without any third parties, be it the bank releasing the money. We want to be a strong part of the community.
“I don’t want to say we were kept in the dark by the bank. It was one of those situations where the bank had complete control over the transaction. When we went through our standard due diligence, in no way, shape or form did we have any knowledge relating to the hotel license, any of this documentation in front of us (now).”
Gillam said the new owners have tried to get everything with Travelodge’s debt up to date and are in the process of collecting the necessary background information for a business license application. The new owners already paid the application fee and the remaining debt.
“In fact, someone came over to the Treasurer’s Office on Friday morning and paid those water bills, as well, even though they had money in escrow with the title company from the closing that was supposed to pay that,” Gillam said. “As a gesture of good faith, they came over and paid that bill right away on Friday morning.”
When Saranchev owned the hotel, Gillam said messages seeking information about the sale and the unpaid debt went unreturned for months at a time. With the new partners at the helm, he has received answers within days.
Arie Leibovitz, president of Ari-El Enterprises, said the partners plan to put decades of experience to use in the new project. Although his four decades in Oakland County real estate development specialize in office and retail, he doesn’t expect any hiccups with the Travelodge redevelopment.
“We believe in the community. We believe in the location,” Leibovitz said. “We have sufficient (experience) in redeveloping properties in several communities.”
The City Commission voted unanimously to table the potential business license revocation until the new owners could apply for their own and bring forth plans for their redevelopment, both of which could take several months to get approved after being submitted.
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