The Dalles economy is poised to get yet another shot in the arm with the recent sale of an iconic local hotel.
The Shilo Inn, situated along one of the more spectacular views of the Columbia River and Dalles Dam, sold for $9.2 million. And major renovations are planned for the 112-room hotel built in 1974 near the Gulick Homestead and Indian Shaker Church. It sits on nine acres at 3223 Bret Clodfelter Way.
“That location has great views,” said The Dalles Chamber Director Lisa Farquharson. “Any hotel updating is going to be beneficial to the community.”
That location has investors counting on the property to return wealth like the Seufert Brothers fishwheel that preceeded it half a century ago upstream.
Improved accommodations for travelers as well as jobs created by the renovation will add to the general economic uptick occurring in The Dalles.
Earlier this year, A1 Hospitality Group announced it was building a 93-room Holiday Inn Express on West Sixth next to the Franz Bakery. It is expected to create 40 jobs and an initial $12 million of investment. And one does not have to drive far in The Dalles to see business and residential renovations.
Housing stock continues to be historically low as newcomers and investors buy into The Dalles. There were just 46 active listings for houses in The Dalles on Thursday, according to broker Carrie Guthrie at Windermere Real Estate.
The city, bounded by the Columbia Gorge National Scenic Area, generally forces investors to turn toward renovations and or putting new construction on infill property -the remaining vacant property within the urban growth boundary.
Farquharson pointed out that brand-named businesses like Holiday Inn Express and Shilo being in the community drives additional development because it gives outside investors a greater sense of security. Larger companies generally do intensive marketing studies to see if there is support for their business, before spending money in new areas.
Ashley Sandoz remembered the day, exactly.
It was noon, July 31st when the 27-year-old Shilo Inn manager in The Dalles got the call.
The Shilo Inn in The Dalles had been purchased. Her new owner was Magical K Management out of Beaverton, run by Jitesh Desai. Mark Hemstreet had sold.
“There was a process of changing hands,” she said. “We had to take the old stuff out and bring the new stuff in,” noting the policies and procedures for herself and staff of 20 were different.
“We’re starting a partial remodel in October,” she said, noting the hotel with more than 70,000 square feet will undergo a complete renovation – including the lobby and meeting room, during the next two years.
The hotel will remain open during renovation, with work being done in phases.
Several cargo containers sit out back of the Shilo currently holding supplies.
“We’re all really excited,” Sandoz said. “The property is due for a remodel.”
The Beaverton company, Magical K Management, operating multiple limited liability companies, purchased two Shilo Inn hotels in July from Shilo Inn, owned by Mark Hemstreet.
Magical K is headed by Jitesh Desai, who refused to comment via proxy —the woman answering the phone at MKM at their headquarters on Tualatin Valley Highway.
Hemstreet did not return calls for comment.
However, Wasco County Court and Benton County Court, Washington documents show that Jitesh and Hemstreet did multiple deals during July to purchase both the Hotel in The Dalles and the riverfront Shilo Inn in Richland, Wash.
Utiiizing Videni Concepts, LLC and Traum Ventures, LLC, Jitesh conveyed a total $12.85 million as well as assuming $4.4 million in loans from 2015 which Hemstreet drew against Shilo Inn, The Dalles, LLC.
Desai is the registered agent of Videni and Traum, according to Oregon Secretary of State business records. Desai’s Miracle K website displays a portfolio of 10 hotels in the Pacific Northwest, ranging from La Quinta Inn & Suites in Moscow, Idaho to a Super 8 in Roseburg.
According to a recent story in the Tri-City Herald, Miracle K recently completed a year-long renovation near the Boise Airport that transformed a former Shilo Inn into a Red Lion Inn & Suites.
“The top-to-bottom project upgraded the lobby and guest amenities and remodeled rooms and bathrooms as well as the exterior,” he paper stated.
“MKM Hotels has a proven history of creating guest value through extensive renovations, repositioning and rebranding hotels,” according to its company website.
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