Really? He’s buying a hotel in Springfield?
City leaders welcome Middle East billionaire’s investment in downtown
BUSINESS | Bruce Rushton
What do Beirut, Budapest, Dubai and Springfield have in common?
All three cities have – or will soon have – hotels owned by Khalaf Ahmad Al Habtoor, a billionaire who lives in Dubai, dabbles in polo and has been photographed over the years with such luminaries as Yasser Arafat, Queen Elizabeth and Jimmy Carter.
The pending sale of the President Abraham Lincoln Hotel in downtown Springfield to Habtoor caught locals by surprise – neither city fathers nor downtown boosters were aware of the deal until Illinois Times broke the story this week.
“Really?” asked Ward 6 Ald. Cory Jobe when told that a super-rich guy who lives 7,400 miles from Springfield is buying a hotel that was once an albatross for taxpayers. “Interesting.”
Interesting indeed. It all came together at lightning speed, according to Steve Horve, a Decatur-area developer who has been in the hotel business since 1989. After visiting the hotel in October while he was in town to hear Carter speak at Illinois College, Al Habtoor made an out-ofthe-blue inquiry that quickly led to a deal, Horve says.
Horve acquired the Abraham Lincoln from the state of Illinois five years ago for $6.5 million at a foreclosure auction held after a group of investors led by former political power broker Bill Cellini failed to pay back construction loans from the state. What looked like a bargain then – Horve at the time said that he couldn’t build a 62-room Holiday Inn for the price he paid – is looking even more golden now, although Horve won’t say what Al Habtoor is paying for the 310-room hotel in a deal set to close within two weeks.
Two appraisals prior to the 2009 sale put the value of the hotel at between $17 million with no improvements and as high as $29.9 million with renovations. After Horve bought the building for $6.5 million, a third appraisal set the as-is value at $11.5 million.
While prior owners allowed the property to deteriorate and claimed that they couldn’t repay state loans because the hotel couldn’t make a profit, Horve spent millions of dollars on improvements, renovating every room and upgrading such basics as laundry services and air conditioning systems. His efforts were sufficient to meet the standards of the Hilton company, which made the hotel a franchise under the DoubleTree name last year. Hilton will manage the hotel once the deal with Al Habtoor closes later this month, Horve said.
It’s all good so far as Robert Egizzi, who owns the Hilton Springfield across Adams Street from the Abraham Lincoln, is concerned, especially if Al Habtoor, who owns a Waldorf Astoria hotel in Dubai, invests in renovations and upgrades.
“If they put a lot of money in the hotel across the street, it would do nothing but help us,” Egizzi said. “We’ve got to push downtown Springfield. The more rooms we have, the better off downtown is.”
Like others, Victoria Ringer, executive director of Downtown Springfield, Inc., was surprised by the sale.
“He (Al Habtoor) bought a hotel in Springfield, Illinois?” Ringer exclaimed.
It’s an apt thought, considering the history of the hotel division of Al Habtoor’s company as described on the firm’s website.
“As the Middle East’s longest established hotel group, it (the Al Habtoor hotel division) has decades of experience, and has carved out a reputation for its exemplary service, and unique properties in the best locations,” the company boasts.
Those locations include Budapest, Beirut, Dubai and, now, Springfield.
Ringer says that Horve will be missed. “I hate to see this outstanding facility not be under local management,” Ringer said. “I hate to not have that personalized Illinois connection to this hotel and the capital city.”
Some foresee changes to the hotel and, perhaps, nearby areas.
“Mr. Al Habtoor now has an opportunity to take it (the hotel) to a new level,” Mayor Mike Houston wrote in an email. “As someone who owns four hotels in Dubai, including a Waldorf Astoria, I believe we can expect to see some great improvements to the hotel in Springfield.”
Jobe lauded the purchase. “It can only be a positive,” said the alderman, who is chairing a committee tasked with collecting development proposals for property near the governor’s mansion recently acquired by the city. “I need to make sure his (Al Habtoor’s) holding company is aware of other opportunities in Springfield.”
Contact Bruce Rushton at [email protected].
