PORT ANGELES — The largest hotel in Clallam and Jefferson counties is about to get a new owner but will keep its familiar name.
The 187-room Red Lion Hotel in Port Angeles is being sold to Wilsonville, Ore.-based BHG Hotels LLC, a spokeswoman for Portland, Ore.-based CoHo Services, which will run the Red Lion for BHG, said Friday.
Maili Morrison of CoHo said BHG had signed a sales agreement to buy the waterfront hotel from Denver-based RLH Corp.
Morrison said BHG, is a family-owned, privately-held company, had authorized her to discuss the sale.
“Monday is the closing day,” she said. “I’m 99.9 percent sure.”
Morrison said the Red Lion Inn & Suites in Sequim is not part of the sale.
The Red Lion Hotel Port Angeles has about 100 employees, General Manager Robert Utz said.
Utz confirmed Friday morning that workers were informed of a pending sale at a meeting Thursday afternoon.
Red Lion and CoHo Services representatives were there.
“CoHo was well received,” said Utz, who will stay on as general manager. “I think it was a positive reaction, sort of a sense of relief that we are moving forward.
“We know what the future is.”
Morrison said existing employees will be able to continue working at the hotel.
“All the employees are being processed for rehiring that should take place Monday,” Morrison said.
The hotel will be thoroughly upgraded.
“Renovations are planned from the inside and out and will take place over the next few years,” Morrison said in an email later Friday.
“No other details are available.”
Morrison said in the email that she is unable to disclose the purchase price.
A Red Lion corporate spokesman did not return repeated calls for comment on the sale Friday.
BHG owner and CEO Bakulesh “Buggsi” Patel did not return a call for comment Friday.
BHG is an acronym for Buggsi Hospitality Group, which was registered as BHG Hotels in 2003, according to the Oregon Secretary of State’s Office.
In May 4, 2012 article on http://lodgingmagazine.com/, Patel said he was given his nickname while attending an English boarding school (https://tinyurl.com/PDN-Patel).
BHG Hotels, which is privately held, owned 24 hotels in the Pacific Northwest and Midwest as of Jan. 31, 2017, according to The Bulletin, of Bend, Ore., where the company bought a Holiday Inn Express.
Patel was the first Asian American to chair the IHG [InterContinental Hotels Group] Owners Association and is the former chairman and CEO of the Asian American Hotel Owners Association.
The Clallam County Assessor’s Office valued the waterfront hotel and land, which overlooks the Strait of Juan de Fuca at 221 N. Lincoln St., at $7.9 million.
The personal property is valued at $801,929.
The personal property has almost doubled in value from $462,222 in 2000, while hotel and land value held steady at the present $7.9 million since 2013, the lowest value since at least 1998.
The value of the hotel and land reached a high of $11.6 million in 2007 and 2008.
Morrison said in the interview that the BHG would retain the Red Lion name and the Port Angeles CrabHouse moniker.
The restaurant occupies the same building as the hotel’s main structure.
“It will be a franchise property instead of a Red Lion-owned property,” Morrison said.
“We pay a franchise fee to the brand to use their brand.”
RLH Corp. announced in October that it would sell 11 of its remaining 18 Red Lion Hotels, including the Red Lion Hotel Port Angeles, to focus on higher-margin hotel franchise businesses rather than invest in direct ownership.
Morrison said BHG was not concerned about buying a downtown Port Angeles hotel about two blocks away from where the Lower Elwha Klallam Tribe is planning to build its Front Street hotel.
A market analysis concluded that the Red Lion’s location on the waterfront and the meeting space that’s available would continue to draw tourists and business travelers, Morrison said.
In addition, BHG will be more competitive and aggressive than the hotel has been in trying to attract new leisure and corporate travelers.
“We don’t have any concerns about there being another hotel in the area,” Morrison said.
“What we have found is that when new hotels come into a market, it creates more compression.
“It will help bring Port Angeles into the light as a destination, which will help our hotel as well.”
Morrison said she’s discussed the sale with Marc Abshire, Port Angeles Regional Chamber of Commerce executive director.
“It only will be a good thing for downtown and for all all the visitors who come here,” Abshire said Friday.
“We have a capacity problem. We need more hotels.
“We are pretty well booked out for the remainder of the summer.”
Lower Elwha Enterprise CEO Michael Peters said Friday the tribe continues to plan for site cleanup and is designing the four-story hotel.
The $20 million project will be on property about two blocks from the Red Lion that the tribe is negotiating to buy from the city.
Peters said that “more than likely,” construction will start after Jan. 1 but that some demolition could occur before the end of the year.
He said he’s not concerned about competition from the Red Lion, echoing Abshire.
“We as well as other hoteliers that are moving into this market are meeting an unmet need,” Peters said.
“At this point, we also feel we will be a different type of offering for tourists.”
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Senior Staff Writer Paul Gottlieb can be reached at 360-452-2345, ext. 55650, or at pgottlieb@peninsuladailynews.com.
