After scheduled auction, city manager floats buyer news for Harrington Inn

A week after what had been a scheduled auction, the Harrington Inn could already have a buyer.

Port Huron City Manager James Freed floated the possibility in an email to City Council members late Saturday afternoon — a slight pull-back of the curtain in courting an apparent out-of-state developer over the last few months.

However, when a potential purchase would close on the historical hotel or what that deal with the court-appointed receiver managing the site, 1026 Military St., would look like wasn’t yet public.

“The Harrington Inn will be avoiding auction. The developer out of Texas that (Planning Director) David (Haynes) and I have been meeting with for literally almost a year has signed a purchase agreement for $700K to acquire the hotel,” Freed wrote in his email Saturday. “They plan to immediately invest between $10 (million)-$12 million into the site to fully restore the hotel. That includes the historic Red Fox martini lounge. If they close as planned, work will begin by summer. This group is one of the most experienced teams to decide to invest in our city.”

The long-vacant hotel property had been posted for auction online last week via RealINSIGHT Marketplace, and by Monday, it was listed as “under contract” on its auction page.

Representatives from Berkadia Hotels & Hospitality, the firm retained to solicit offers earlier this year, did not immediately respond to a request for comment on the Harrington’s status early Tuesday.

The site had previously been up for auction last spring, initially going to a Florida-based financier whose deal was documented in court records this summer. It was not clear what became of that bid.

The Harrington Inn was purchased for redevelopment by California attorney Jeff Katofsky in 2018, but the hotel ultimately joined two of his St. Clair Inn properties in receivership more than a year ago amid litigation from mortgage lenders to recoup millions in debt on all three.

One debt tied to any purchase of the Harrington remains a $3.4 million from a PACE, or property assessed clean energy, loan originally retained for environmental-friendly improvements city officials have since confirmed were never implemented on the property.

Someone with 'a lot of capital': Who's interested in the Harrington?

On Monday, Freed said he couldn’t comment further on what lay ahead for the Port Huron hotel site.

Others following the process said they’ve received differing notices on the status.

Local developer Larry Jones, who’s previously expressed interest in the building, said he’d gotten an email updating on the process and said, “They were going to bid it, but now, they’ve sold it outside of the bidding process.”

He joked he wasn’t “the guy they’re working with,” adding he was glad someone was taking it on.

“So, we’ll see where it goes,” Jones said.

Gerry Kramer, of Kramer Commercial Realty, said he knew there hadn’t been a closing and that he was part of a group that bid on it, but that he hadn’t heard much further.

“Our offer’s still open,” he said. “… So, I think there’s something going on, and I think there’s more than us (who were interested in) bidding. That much I do know.”

The Harrington site last operated as an assisted living center for seniors under the Harrington Inn until that closed in 2017.

The Harrington Hotel first opened in 1896 and operated as such for several decades — famously a visiting stop for future U.S. President Harry S. Truman and his wife, Bess, on their honeymoon, a host of Hollywood elite during the 1940 Port Huron premiere of the film “Young Tom Edison,” and other historical figures.

In the 1950s and 1960s, the hotel faced some financial difficulties and legal challenges amid its evolving ownership, and by the 1980s, its rooms were being rented out on a weekly and monthly basis before it failed city inspections and was shut down.

Still, it was in that latter decade that the Harrington was the focus of a massive push from local leaders to be preserved. It went on the National Register of Historic Places in 1982.

By the mid-1980s, Kramer was chairing a small group of investors looking to restore it as they studied the feasibility. And at one point, the effort looked to tear down the back of the property, which was added several years after the hotel was built, to be replaced by a two-story addition featuring an indoor swimming pool.

These days, Kramer said the historic nature of the property still had plenty of appeal for potential developers and hotel brands.

“It’s normal to have a whole lot of people interested in that. It’s just a boatload of work,” he said Monday. “Restoration of the hotel is one and a half times cost due. We know, we’ve done them. We did the Thomas Edison Inn into the Hilton. We know what the costs are, and you’ve got, in particular, a labor shortage right now. So, you’ve got a labor gap. You’ve got a big construction gap for financing. So, it’s going to take somebody that’s used to doing projects and has a lot of capital.”

Contact Jackie Smith at (810) 989-6720 or jssmith@gannett.com.

This article originally appeared on Port Huron Times Herald: After scheduled auction, city manager floats buyer news for Harrington Inn