A hotel that opened in Parker in late 2019 has filed for Chapter 11 bankruptcy blaming the one-two punch of the pandemic and a burst water pipe, both of which prompted the hotel to close for months.
Mainstreet Pier LLC, which owns the 51-room Ascent on Main hotel at 18595 Mainstreet, said in a Sept. 10 filing that it owes between $10 million and $50 million to fewer than 50 creditors.
Companies use Chapter 11 bankruptcy protection to reorganize and keep the business alive, paying creditors over time.
The hotel remains open. The cheapest room available for some October dates is $229 a night, according to its website, although rooms can be nabbed for as little as $134 a night on dates farther out.
Rick Hill signed the bankruptcy filing on behalf of the entity, listing his title as manager.
In a Sept. 10 affidavit, Hill said Mainstreet Pier purchased the property in December 2017 for $1.4 million and began the process of developing the hotel, which opened in December 2019. Independent Bank provided financing for construction.
In addition to the 51 rooms, the hotel building has an event space, a jewelry store and four restaurants.
The hotel, like some others around the region, closed when the coronavirus pandemic began locally in late March 2020. It reopened in late June of that year, “but the pandemic reduced the demand for hospitality significantly and the business struggled financially.”
Then, in February of this year, “a pipe burst and caused a major water leak,” prompting the hotel to close again — this time for far longer.
“As a result of backups in the supply chain caused by COVID, the piping issue was not formally resolved, and The Ascent not authorized to reopen, until August 9, 2021,” Hill wrote. “During that time, Debtor had to find replacement venues for a number of weddings, and the Debtor’s restaurants — which are dependent on the occupancy of the hotel — had to significantly scale back their operations.”
An insurance claim is outstanding, Hill wrote.
Hill wrote that, in early September, the company asked Independent Bank for an extension of its forbearance agreement with the bank, but the bank instead “swept the Debtor’s accounts, pulling in excess of $600,000.”
Court records show that Independent Bank sued Mainstreet Pier in Douglas County District Court a day before the company filed for bankruptcy. The financial institution said it gave Mainstreet Pier a $12.38 million construction loan in July 2018, and that the company has failed to pay monthly interest charges of $55,320 multiple times since then.
Besides Independent Bank, the company listed its largest creditor as Parker Mainstreet Parkers LLC, owed about $935,000 in connection with multiple loans. That entity said in a lawsuit filed last year that it sold Mainstreet Pier the land where the hotel was filed.
Mainstreet Pier said in the filing that it also owes $288,000 to Douglas County for property taxes and $268,845 to Mars Development LLC, which Hill wrote originally managed the hotel. But Mainstreet Pier hired Valor Hospitality Partners to operate the hotel after the onset of the pandemic, he said.
Two of the restaurants at the property, the Douglas and the Upper Deck, are operated by Mainstreet Pier, Hill said in the affidavit. The other two, West Main Taproom and Doug’s Diner, pay monthly base rent of $12,446 and $6,248, respectively.
“As things stand today, Debtor is in a position to begin operating The Ascent at full capacity, with its two restaurants open for dine-in service, and all 51 rooms open to be booked,” Hill wrote. “In addition, a recent appraisal of The Ascent put its value at $23,500,000.00 as an ‘as-is’ going concern – well in excess of the Debtor’s obligations. The Debtor’s goal in this case is to resume operations and obtain financing to pay off Independent Bank in full. If the Debtor is ultimately unable to obtain financing, Debtor will sell The Ascent and satisfy the claims of creditors that way.”
Attorney Jonathan Dickey of Kutner Brinen Dickey Riley is representing the company in bankruptcy proceedings.