| Hotel Sask. up for sale L-P Financial Editor December 17, 2000 By BRUCE JOHNSTONE The grand dame of Regina hotels, the 73-year-old Hotel Saskatchewan Radisson Plaza, is once again on the auction block. FCC Group Investment Corp., an immigrant investment fund, is putting the former Canadian Pacific Railway hotel up for sale through Colliers International Hotel Realty. In a press release earlier this week, FCC Group said the hotel has been "doing very well'' under new management and is a "very profitable business operation for its owner.'' The release said "there has been several expressions of interest'' by national and international hotel chains in the Hotel Saskatchewan. The 300 investors in FCC Group decided to list the hotel with Colliers to "determine the market interest and true market value'' of the downtown landmark. Marla Preston, general manager of the hotel, said 30 members of the board of the investment group met in Regina over the weekend to discuss the sale and other matters. "They were overwhelmed. They were pleasantly surprised,'' Preston said, adding the investors -- who are from the Philippines, Middle East, Eastern Europe and the Far East -- now appreciate the need for a parkade facility. She said the investors are giving Colliers about six months to find a suitable buyer, but will only sell the hotel if an acceptable offer is received. "Some of them feel strongly about keeping the hotel. Some of them are very proud of it.'' Preston said the hotel is running at about 70-per-cent occupancy and management aims to improve on that in 2001. "Our strength is in the business traveller. We're looking to build up the weekend traffic.'' Another reason to sell the hotel is recoup some of the $23 million invested in the property by the fund managers, First Canadian Capital Corp. of Saskatoon. First Canadian acquired the hotel for $7.3 million in 1990 and undertook major renovations that took three years and cost $18 million -- nearly twice as much as projected. Consequently, the hotel lost money -- $9 million between 1992 and 1994 -- while the fund managers paid themselves millions of dollars in management fees. As a result, the investors launched legal action against First Canadian Capital Corp. in 1995 for $48 million, representing the total investment of three immigrant investment funds, FCC I, FCC II and FCC III. The lawsuit is still winding its way through the courts, with a trial date set for Saskatoon in spring of 2002. But the courts granted control of the hotel to the investors, who contracted out the management to Radisson Hotels about seven years ago. Preston said the hotel, which has won six consecutive Four Diamond Awards from the Canadian Automobile Association and seven President's Awards from the Radisson Hotels Worldwide, is profitable from an operations standpoint. "It has been very profitable -- not counting the money (the immigrant investment fund) invested.'' |