Downtown Marriott files Chapter 11. It stays open while reorganizing, including public debt

The owner of downtown Milwaukee's Marriott Hotel − financed in part with public funds − has filed for Chapter 11 bankruptcy protection.

The 205-room hotel, 625 N. Milwaukee St., remains open. The filing allows it to continue to operate as the hotel's owner, Wisconsin & Milwaukee Hotel LLC, reorganizes its finances under bankruptcy court supervision.

The preliminary filing in U.S. Bankruptcy Court shows Wisconsin & Milwaukee Hotel with assets ranging from $10 million to $50 million, and liabilities in the same range.

The company's creditors include the Wisconsin Housing and Economic Development Authority, a state-created agency that primarily helps finance housing.

The authority also finances commercial developments with funds it raises by selling tax-exempt bonds to private investors and through federal tax credit allocations.

Wisconsin & Milwaukee Hotel owes $42.5 million to the authority, with $16.1 million of that amount classified as unsecured by collateral, the filing said.

That raises the potential of a write-off for part of that debt depending on how Wisconsin & Milwaukee Hotel's finances are restructured. The authority is the largest unsecured creditor.

The Marriott opened in 2013.

It was developed by Jackson Street Holdings LLC, led by Mark Flaherty and Ed Carow. That group also operates two other downtown hotels: the Westin Milwaukee and SpringHill Suites.

“The hotel is doing very well operationally,” said Carow, in a statement to BizTimes.com.

“Prospects for continued improvement in operations are strong," Carow said. "However, existing loans have matured, and need to be restructured or refinanced in order to assure the business’s future financial health."

The hotel industry continues to recover from the 2020 COVID-19 pandemic.

While downtown last May saw the opening of The Trade, a 207-room Marriott Autograph hotel at 420 W. Juneau Ave., there also have been some troubled properties.

Those include the Cambria Hotel, 503-521 N. Plankinton Ave., which was sold in December through a foreclosure auction, and the Hampton Inn and Suites, 176 W. Wisconsin Ave., which was sold in October by its lender.

The Cambria has remained open. The Hampton has been closed since May.

The Marriott closed in March 2020 as the pandemic raged. It didn't reopen until summer 2021, well after other downtown hotels reopened.

Tom Daykin can be emailed at tdaykin@jrn.com and followed on Instagram, X and Facebook.

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This article originally appeared on Milwaukee Journal Sentinel: Milwaukee Marriott files for Chapter 11 bankruptcy. Hotel remains open