An Oregon hotel investor and operator thought his nearly $1.6 million bid had won the auction for the Buffalo Airport Inn in Lancaster.
Hours later, the deal fell through when the hotel's current owner rejected the bid.
The sudden turnabout by Singh Lodging likely means that the struggling Lancaster hotel is heading to another type of auction – a foreclosure auction as early as next week.
The series of events began Friday morning when an unidentified buyer – who was participating by phone – won the back-and-forth auction with an offer of $1.575 million. That finally beat out a local bidder, after the pair drove the price up over about 20 minutes from as little as $200,000 at the outset.
The bid was nearly $200,000 more than the $1.38 million in debt that Singh Lodging currently owes on the hotel.
But that apparently wasn't good enough for Singh, which exercised its right to reject the offer if it deemed the price insufficient. Singh also owes state and county tax debts, as well as another loan.
"I was surprised," said auctioneer Eric Monahan, of Cash Realty & Auctions, which conducted the sale. "I thought we were close enough, but apparently not."
The hotel will now to go a court-ordered foreclosure sale next week, scheduled for Thursday.
Singh Lodging – owned by Kabal S. Virk and Harjinder K. Virk – put the 88-room motel near the Buffalo Niagara International Airport up for public auction in hopes of garnering enough money to pay off what it owes prior to the foreclosure.
The Virks acquired the 30,435-square-foot motel at 50 Freeman Road in January 2007 for $2.25 million, investing in upgrades over the last decade, including a new roof last year. But they defaulted on a loan from Zions Bank of Utah, which initiated foreclosure against them last March and won a judgement in December.
In all, 13 bidders had registered for the auction, which was held in a double-queen bedroom on the first floor, where the green carpet was fading, and the orange paint was peeling from the walls. Nearly 30 people attended in all.
Monahan tried to start the bidding as high as $2 million, but had to drop down to just $200,000 before he had any takers.
"I know you all didn't come to look at each other," he prodded.
The motel, which sits on 1.92 acres just off Transit Road near Salvatore's Grand Hotel and the Thruway, was formerly a Microtel, a Knights Inn and a Rodeway Inn before its current name. It's appraised at $2.8 million, and is currently assessed at $2.5 million, with about $80,000 in annual taxes.
According to Cash Realty, the motel has six king-sized rooms, 45 queen rooms, 13 double queen bedrooms, 15 triple queen bedrooms and 19 double twin bedrooms. It also includes a lobby and breakfast dining area, as well as in-house laundry with two commercial washers and dryers.
Besides the new roof, it also had bathroom tiles replaced in June 2017, while the rooms were repainted in 2014 and the hallways in 2010, at the same time that new carpeting was installed and the parking lot was repaved. The mattresses were changed in 2009. Gross revenues were $827,000 in 2015 and $959,000 in 2013.