Bank buys Fort Scott Inn, keeps it open

A local hotel currently in foreclosure remains open for business following a recent auction of the property and an agreement that will allow its most recent owners to continue managing the establishment.

At the April 22 auction, held at the Bourbon County Courthouse and conducted by Bourbon County Sheriff Ron Gray, Sunflower Bank of Salina purchased the Fort Scott Inn back from former owner Bhupinder Singh "Bob" Dhillon.

The bank and Dhillon also signed an agreement for Dhillon to manage the hotel indefinitely, or until it's sold, Sunflower Bank Special Assets Officer Chris Yohe said.

"We entered into a management agreement with the current owners while we pursue a buyer," Yohe said.

Yohe said there were no other bidders at the auction.

"Nobody else submitted a bid, unfortunately," he said. "The bank bought the property back."

The bank purchased the hotel at the auction for about $1.4 million.

Part of that amount was used to pay 2010 real estate taxes on the property. An updated appraisal of the hotel valued it at $1.5 million, Yohe said.

Yohe said the bank recently showed the 78-room hotel to one interested party and received a verbal offer that was lower than the price the bank is willing to sell it for.

He added there are some local investors who have shown interest in the hotel.

"Our preference would be to have somebody local buy it," he said. "That would be best for the community."

Yohe said the hotel is currently accepting reservations and all rooms should be available for rent.

The property requires some cleaning and maintenance, and the roof needs several thousand dollars worth of repairs.

Yohe said he planned to be in Fort Scott this week to "get bids to get the roof repaired and put it on the market."

"We're trying to get the roof repaired and the hotel cleaned up ... so it's something the community can be proud of," he said.

In March, Dhillon told the Tribune that due to the effects of a slow economy, he would be closing the establishment in April, when the property would be put up for bid at auction. He said the hotel was appraised at $2.6 million when he bought it in 2007 from the Eastern Shawnee Indian Tribe in Oklahoma. He made a 35 percent down payment on the hotel at that time. The amount of the loan was about $1.2 million.