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Posted on Tue, Feb 21, 2012 : 5:58 a.m.

Michigan hospitality company buys foreclosed Ann Arbor hotel for $5.3M

By Lizzy Alfs

Lodgco Management, a Mt. Pleasant-based hospitality company that builds and acquires hotels, recently purchased the Hawthorn Suites on Green Court near Plymouth Road in Ann Arbor for $5.358 million.

The company now plans to invest $2 to $3 million in an extensive remodel of the property, which has been in receivership after the lender foreclosed in 2009.

Lodgco’s first step: “We’re going to come in right now and do some quick updating to improve the guest experience,” said CEO Michael Smith.

Smith said the 82-unit hotel will be renovated in phases. The first upgrades will include installing high speed internet, cleaning up the property and improving the landscaping. The rooms will then be completely revamped, and the hotel could eventually switch brands.

Lodgco is rehiring 18 to 25 part-time and full-time employees to work at the hotel.

Smith said the company - which owns and operates 14 properties in the state under various brands - has wanted to enter the Ann Arbor market for a long time, and the Hawthorn Suites presented the perfect opportunity to buy into a tough market.

“We feel it’s a good, strong market,” he said. “I think Ann Arbor is always cutting edge. They’ve always had a consistent economy.”

But hotels in the city rarely come up from sale, Chuck Skelton, president of Hospitality Advisors Group of Ann Arbor, pointed out.

“Typically, people in Ann Arbor own and hold (a property),” he said. “It’s a strong market and it’s hard to get something developed.”

Once registered to Sanjay Patel of Sterling Heights, a court-ordered receiver has been running the Hawthorn Suites hotel for a couple years. The hotel entered foreclosure in 2009 with an outstanding loan of $4.66 million to Zions First National Bank of Salt Lake City.

Court documents filed during foreclosure on the property stated it could lose its franchise due to poor management. Issues cited in a report at the time said the hotel’s central reservation system is out of date and that cost cutting hurt operations.

Although occupancy dipped slightly in past years, Skelton said the hotel has historically operated above Ann Arbor’s average occupancy rates, which were around 66 percent in 2011.

Thanks to the location, the hotel’s bones and the upcoming remodel, Smith is optimistic about the future of the hotel.

“The property appraised very well,” he said. “Even though there was a downturn in the economy, they are still up on that corner. That area has done really well and I think Ann Arbor has done really well.”

According to city documents, the hotel’s assessed value was $3.486 million for the 2011 tax year, making its estimated market value about double that.

Lizzy Alfs is a business reporter for Reach her at 734-623-2584 or email her at Follow her on Twitter at



Wed, Feb 22, 2012 : 12:04 a.m.

Three out seven comments violated guidlines for this story? Amazing!

greg, too

Wed, Feb 22, 2012 : 4:18 a.m.

Hotel renovation is a hot button topic, I guess.

Buster W.

Tue, Feb 21, 2012 : 5:20 p.m.

"Thanks to the location, the hotel's bones and the upcoming remodel, Smith is optimistic about the future of the hotel." Bones???

Berda Green

Tue, Feb 21, 2012 : 4:53 p.m.

good luck


Tue, Feb 21, 2012 : 3:09 p.m.

The fact that this property was in receivership for two years proves what I been saying about Rivers Edge. Default can take awhile when dealing with a rental type property.


Tue, Feb 21, 2012 : 1:44 p.m.

This is encouraging news. Several years ago I had family stay in a two bedroom suite and had an excellent experience. However, I hope that lodging rates do not change.