Former Indies Suites owner Ronnie Foster said on Friday that he had no choice but to sell the hurricane-damaged property for the value of its land.
‘I assessed the situation regarding our loss of the Indies Suites very carefully, and had to come to a difficult decision,’ he said.
‘It’s a nasty situation, and I didn’t know what else to do.’
Indies Suites, a hotel that sold week-long club memberships to people in a way similar to timeshare, sustained severe flood and structural damage during Hurricane Ivan.
Its roof was blown off during Ivan and the building has been open to the elements since then.
The property was sold for US$1.3 million on 27 January to St. Matthew’s University for conversion to student dormitories.
In a newspaper advertisement placed last Friday, Mr. Foster said Indies Suites club members had a right to use only approximately 20 per cent of the available weeks.
Mr. Foster said the property had been operating at significant yearly losses.
‘If I hadn’t been putting money into it every year, it would have gone under a long time ago,’ he said.
Mr. Foster said Indies Suites’ poor financial statements precluded refinancing the property.
‘No one was going to refinance something operating at a consistent loss.’
Nor was the yet-received insurance settlement going to substantially change the property’s outlook, Mr. Foster said.
‘We only had $200,000 insurance,’ he said, adding that he was told he was underinsured in any case and therefore did not know what kind of settlement would be received.
St. Matthew’s University said it expects to spend more than $2 million to rebuild the property.
Mr. Foster said it would have cost him much more to rebuild
‘If I had to build it back to hotel standards, with all the stringent tourism guidelines, the construction costs would have been three times (that of St. Matthew’s),’ he said.
Mr. Foster said he did not know if club members would try to sue for their lost rights.
Club members paid US$6,500 to US$10,000 per week for the right to use a room, but Mr. Foster said they did not actually have any title to the property.
‘I am very saddened by the loss and disappointment of club members,’ he said. ‘Over the last 20 years, club members and their families have visited the resort and we have built very close relationships, which I will miss very much.’
However, Mr. Foster said there was no other way forward with the property other than to sell it.
‘I’ve never ripped anyone off in my life,’ he said. ‘And I certainly did not intend to. I’ve never had a situation like this in my life.’
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