Short Pump Hilton enters receivership
Fairfax’s Crescent Hotel Management Services named receiver
The Hilton Richmond Hotel and Spa in Short Pump has entered receivership after its owner, Shamin Hotels, fell behind on loan payments, according to documents filed in Henrico County Circuit Court.
In an order dated Jan. 21, Fairfax-based based Crescent Hotel Management Services LLC was named special receiver for the Short Pump Hilton, which was the flagship of Chester-based Shamin Hotels’ empire. According to its website, Crescent manages dozens of hotels and resorts in the United States and Canada, including Hilton-, Marriott- and Hyatt-branded properties.
As receiver, Crescent will “operate, manage, maintain and control” the 254-room property, which opened in 2009.
Previous court documents state that the noteholder wants Crescent to keep the property open and run it while a foreclosure sale is conducted.
In a complaint filed on Dec. 2, 2020, 12042 West Broad Street Holdings LLC, the Bethesda, Maryland-based noteholder on the property, alleged a breach of contract, saying Shamin Hotels fell behind in its loan payments beginning in April 2020. That filing states that Shamin borrowed $45 million from JPMorgan Chase Bank National Association on Oct. 11, 2013.
Shamin CEO Neil Amin, Shamin’s lawyers, Crescent Hotel Management Services and the lawyers representing 12042 West Broad Street Holdings and did not return calls for comment for this story.
Amin has said the hotel was appraised at $68 million at the time of the loan, and the purpose of the loan was to refinance the original construction loan. He also said his company was cooperating with the noteholder to allow them to take control of the property through receivership and a possible public auction. Shamin fell behind in its loan payments because of the pandemic, he said.
“This is a unique situation that is affecting all conference hotels nationwide, and with our revenue declining by $10 [million] since the start of the pandemic and a noteholder that is not being supportive, we felt that this is the best decision for our company and our organization,” Amin told Virginia Business in December.
As of Dec. 1, 2020, Shamin owed $46.8 million on the loan, including a principal amount of $40.2 million, $1.18 million in accrued interest, $1.19 million in default interest and more than $127,000 in accrued late fees, according to the December filing. The filing noted that the property may be worth as little as $26 million.
Amin said that his company, one of the largest independent hoteliers in the United States with more than 60 properties, initially attempted to work with the noteholder until they “demanded significant lender fees and unsuitable guarantees in order to access those funds. We then offered other solutions such as providing a [significant] influx of capital to support the hotel over the next few years or paying off the loan at value significantly higher than the lender’s valuation.”
Amin has said that his other hotels are performing better than the Short Pump Hilton because they are less dependent on revenue from conferences. Shamin has new properties scheduled to open in 2021, including a Home2 Suites and a Hampton Inn and Suites in Short Pump, and The Landing at Hampton Marina, a Tapestry Hotel by Hilton, in Hampton.
Shamin began in January 1979 when Amin’s father, P.C. Amin, and uncle, B.N. Shah, purchased their first hotel in Lumberton, North Carolina. Shamin is an amalgam of the founders’ last names.