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NEW OWNERS TO REVITALIZE GRAND ISLAND HOTEL
ALL OF THE HOLIDAY INN'S 263 GUEST ROOMS WILL BE REFURBISHED OVER A TWO-YEAR PERIOD

The Holiday Inn Resort and Conference Center on Grand Island has a sweeping view of the river, a health club, and lots of space for banquets and meetings.

But in recent years, the Whitehaven Road hotel has also had falling occupancy rates and weak financial results.

The property's new, locally based owners say they can revitalize it, pledging to give the hotel the dedicated attention they say it lacked under its previous, corporate owner.

Howard L. Schweitzer and Maury Zeplowitz bought the 263-room hotel for $3.35 million through their business, American Hospitality Group LLC, from Lodgian Inc., an Atlanta-based company that is one of the nation's largest independent owners and operators of full-service hotels. The complex had been listed for sale by CB Richard Ellis Hotels at $4.95 million.

"We think we really have a jewel here," Schweitzer said.

Lodgian labeled the hotel "non-strategic," and placed it and 18 other hotels up for sale after Lodgian emerged from bankruptcy in 2003. Lodgian said the Grand Island hotel had a net loss of $100,000 last year.

Lodgian has now sold 10 of the hotels on its list, and is still trying to sell two others in Niagara Falls: the Holiday Inn Select and Four Points by Sheraton.

Schweitzer said a CB Richard Ellis broker in Buffalo, Robert Roller, contacted him about the Grand Island property and got him interested. Schweitzer and Zeplowitz were formerly part of Upper Canada Hotels, an investment group which owns hotels in Niagara-on-the-Lake, Ont.

Schweitzer said he and his business partner considered the Grand Island hotel "attractively priced and an underperforming asset."

"We were looking for an investment we could own and control," Schweitzer said.

Some things won't change under the new ownership. Daniel R. Gilliland, who has been the general manager for more than two years, will remain in that job. The new owners credit him with starting to improve the property's results even before the ownership change.

"2004 will be significantly better than 2003" for the hotel, Schweitzer said.

They are also keeping the rest of the work force, which exceeds 200 people in peak months, and the hotel will remain a Holiday Inn. The Grand Lady, which operates cruises from a dock behind the hotel, will remain a tenant.

Richard Deegan, the Grand Lady's owner, said he was optimistic about the ownership change, and the focus that local owners could bring to the hotel.

"It's a very nice relationship that we have," said Deegan, whose business started offering cruises in 1998. "We're just one more amenity for the hotel."

The new owners say Lodgian made significant upgrades to parts of the hotel, which was built in 1972.

But American Hospitality's partners say they will go further: they plan to refurbish all of the guest rooms over a two-year period, starting next year.

They will also update workout equipment in the on-site health club, the Island Fitness Centre, which has 1,100 members, Schweitzer said. And by next summer, the owners plan to add an outdoor dining pavilion overlooking the water.

Zeplowitz said the hotel draws a mix of leisure and business customers, and the partners plan to pursue business from both sources.

Schweitzer said he believes the planned upgrades and the locally based ownership will help strengthen the hotel. It now has an internal sales staff; under its last owner, those duties were handled by an office responsible for four or five of the corporate parent's properties, Schweitzer said.

Schweitzer said he and Zeplowitz are still taking care of the ownership transition, but he said they have aspirations beyond the Grand Island hotel. They plan to buy another hotel, which he declined to identify.

Richard Geiger, president and chief executive officer of the Buffalo Niagara Convention and Visitors Bureau, said he welcomed the switch to local ownership at the Grand Island hotel.

"We're delighted they're in control of it," Geiger said. "We look forward to working with them."

e-mail: mglynn@buffnews.com

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