Feb. 06–ALBANY — The Corning hotel management company that purchased the downtown boutique hotel 74 State paid $3.8 million for the property, property records show.
Officials with Visions Hotels of Corning, which owns hotels across upstate, had declined to reveal the purchase price last week when the transaction became public.
The price is relatively cheap after investors and lenders poured more than $10 million into the hotel, which opened in 2007 to great fanfare as a sign of renewed vitality of downtown.
Although the building itself appears to have been purchased in 2002 for under $1 million, Berkshire Bank provided investors with a $8 million loan in 2005. Another $3 million was loaned to the company in later years, bringing the total invested in the venture — mostly through loans — to about $11 million.
Among the original group of investors was McGinn, Smith & Co., the Albany-based brokerage firm that collapsed several years ago amid federal investigations into securities fraud. The company’s founders were later convicted of federal securities fraud and are now serving prison sentences. 74 State was just one prominent area real estate project that had been backed by McGinn, Smith, only to suffer when its investment funds soured.
The property was foreclosed on in 2012 and sold at auction by CIT Lending Services Corp., which had taken over the hotel’s mortgage from Berkshire Bank.
An affiliate of CIT that was created to hold the property, Ittleson Albany Hotel LLC. It sold the property on Jan. 29. to Albany Lodging Group LLC, which is an affiliate of Visions Hotels.
Visions Hotels will operate 74 State as a limited service hotel, meaning it doesn’t intend to run a bar and restaurant as had been done under the previous owners. The Corning-based management company owns hotels across upstate and recently built one in Pennsylvania.
“We’re looking to upgrade the hotel,” Rakesh Patel, vice president of operations for Visions Hotels, told the Times Union last week. He said that could include rebranding the hotel under a popular national hotel chain name.
lrulison@timesunion.com, 518-454-5504, @larryrulison
