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Holiday Inn deal signing expected soon

Buyers are expected to sign a contract on the Holiday Inn- Genesee Plaza in two weeks or less.
Out-of-town investors who sent a first letter of intent to the 466-room downtown hotel’s current owners in March inked a final letter of intent earlier this month, and are expected to sign a contract no later than July 12, said Herbert Mendelson, a partner in a group of Rochester and New York City investors that currently owns the Genesee Plaza.
A final closing on the property will not take place until after Dec. 31, he said.
Mendelson’s group is under the gun of Holiday Inn Worldwide’s long-stated intention of pulling out as the Genesee Plaza’s operator Dec. 31, when its current contract with Mendelson’s group expires.
That move was prompted by the firm’s decision several years ago to have only its own franchisees run Holiday Inns after it was itself acquired by the United Kingdom-based Bass PLC.
Mendelson declined to identify the Genesee Plaza’s prospective buyers other than as a large corporation that owns and manages a number of U.S. hotels, including several Holiday Inns.
Its current roster of Holiday Inns notwithstanding, the company will change the Genesee Plaza’s flag, running it under a different name, he said.
While the downtown hotel has operated as a Holiday Inn since it first went up in 1971, such flag changes are not unusual. The Radisson Hotel at Rochester Plaza, for example, has changed flags and owners three times during roughly the same period. From 1983 to 1993, it was the Stouffer Rochester Plaza Hotel. Before that it was the Americana.
Although Mendelson said he is reasonably confident the sale now in the works will close, he conceded that it is not yet a done deal.
The buyers, for one thing, have not completed due diligence, he said. They also hope to negotiate substantial financial concessions from Rochester’s city government, but so far have not worked out any deal with Mayor William Johnson Jr.’s administration, he added.
Deputy Mayor Jeffrey Carlson said the city is willing to talk but not until it knows what it is talking about.
Carlson conceded that the city considers the Genesee Plaza a key component of Rochester’s downtown whose loss could affect the Rochester Riverside Convention Center’s ability to draw business. The city thus can hardly avoid granting some boons to the new owners, he said.
However, Carlson added, “We’ve said all along that we are not looking at any concept of city incentives on a deal we haven’t seen. We’re business-friendly, but we’re not going to be taken for granted.”
Whoever buys the hotel will likely have to put substantial sums into renovation.
In 1994, Mendelson told the Rochester Business Journal that the 25-year-old Genesee Plaza needed a $5 million stem- to-stern makeover. Carlson at that time said the city would help win a bank-financing package to fund a refurbishing effort.
But while Holiday Inn Worldwide has continued to maintain the property, the total makeover Mendelson talked about did not happen.
Whether the current sale talks reach fruition or not, the hotel will stay open, Mendelson said.
If the deal falls through or fails to close by Dec. 1, the present owners probably will hire an interim operator to run the hotel, he said.


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