The trials and tribulations of the Belvedere Hotel never seem to end. First a Florida developer backed out of a contract to buy the building for $5.5 million. Then a foreclosure auction failed to produce a third-party buyer, prompting creditors to acquire the Mount Vernon landmark for $3.5 million -- which just a few weeks ago was the estimated value of the 97-year-old hotel's food and beverage operations alone.
Over the past 12 years, Victor Frenkil sank nearly $12 million into the Belvedere, including $6.6. million in city money that now will not be repaid. He saved the building but never could operate it profitably. As the federal government's Resolution Trust Corp. keeps liquidating prime properties at distress sales amid deepening recession, the prices paid for marginal hotels throughout the country have plummeted. The slide is so bad that even getting an accurate appraisal is difficult.
Thursday's auction did two things. It established a price for the Belvedere, even though that price was $400,000 shy of a professional appraisal just two weeks earlier. The auction also removed Mr. Frenkil and the city from having any say in the building's fate by making a consortium led by Philadelphia's Meritor Savings Bank the sole owner. That bank can now try to find a buyer for the 180-room Belvedere, its shopping arcade and garage or hire professional turnaround artists to revive it either as an apartment complex or hotel.