Okla. firm takes over Fort Scott Inn

Wednesday, September 28, 2011
The Fort Scott Inn sign reminds people that the hotel is open for business. It was recently taken over by Hotel Broker One, a firm in Oklahoma that operates around the country.(Ruth Campbell/Tribune)

The current owners of the Fort Scott Inn want people to know the hotel is open and it's been spruced up for visitors.

Mike R. Craddock, managing broker for Hotel Broker One, said his firm took over the hotel in June and is currently running the establishment as an interim step to selling it. The former owner was Bhupinder Singh "Bob" Dhillon. Sunflower Bank of Salina bought the inn at auction April 22 and it was purchased by Hotel Broker One in June.

"We have it listed for sale, but we're managing it. We can deal with prospects and let them know what to expect," Craddock said. "We spent several weeks just cleaning the place up. When we came in, the pool was green. It's now crystal clear. Unfortunately, it's freezing."

Mike Craddock of Hotel Broker One.

The hotel, located at 101 State St., sits on about 2.5 acres and includes 77 units, meeting space and a pool. The restaurant has been closed for a year and Craddock said he has talked to several people about re-opening it, but he's not certain what equipment is operational and what's missing.

Much of what Hotel Broker One has done since it obtained the lodging is taking care of maintenance, increasing the hotel's "curb appeal," making sure the rooms are neat and everything works.

A new roof was installed in July and new signs put up. The one that can be seen from U.S. 69 notes that the establishment is open.

"It's getting the property to where people feel good about staying and they recommend it," Craddock said. "We've worked really hard to get it clean to where it looks good. ..."

"I try to keep the property the way I'd like the property and I'm more picky than most customers," Craddock said.

"We're to the point where we feel very comfortable. We've taken it as far as we can without doing big capital improvements," he added.

The next step is selling the property, but the No. 1 problem in the current economic climate is the ability to obtain financing, said Craddock. His company, which manages and sells hotels, started in Oklahoma City and Tulsa and has offices around the country.

In a decent market, the typical transaction time would be 90-180 days.

Hotel Broker One obtained Fort Scott Inn for $1.525 million at the end of June. Craddock said there have been several possible buyers. "We've actually shown the property," he said. The firm also uses LoopNet, a commercial real estate site, its own website and produces its own brochures and packets.

"I'm calling buyers every week. I've talked to multiple property owners already" and have cold called people, Craddock said.

A hotel's value, said Craddock, is based on the revenue derived from the business.

The average daily rate to stay at the inn is $55 and occupancy has increased from 20 percent to 35 percent, however, he said you want 50-60 percent occupancy. "We're getting a lot more people now," Craddock said.

When Hotel Broker One took over, the hotel had two employees. "The Dhillons ran everything else. When we got there, we were able to increase the staff by three FTEs (full-time equivalents)," Craddock said. This includes the two housekeepers who were there when his company bought the hotel from Sunflower Bank of Salina, plus four part-time and one full-time staff member.

Craddock praised the Dhillons for their cooperation during the transition and Sunflower Bank, which renewed the hotel's chamber of commerce membership. Danny Craig, a local roofing contractor, was used for the roofing work and the Signmaker for the signs. "I've enjoyed working with the city, too," he said.

The next level is franchising it or keeping it independent. "We need to make sure it's viable," said Craddock.