Aug. 21–In one of the country’s biggest hotel deals of the year, Duluth-based ZMC Hotels’ portfolio of 29 hotels has been sold.

The sale to the California-based Hall Equities Group closed on Thursday afternoon.

ZMC owners wanted an all-or-nothing deal for their hotels — and they got it.

“It’s a very huge deal, spread over 10 states,” said Ken Goldfine whose 14-year stint as ZMC’s chairman and CEO ended with the closing. Also departing from the upper ranks of the family business are his cousins John Goldfine and Amy Goldfine.

The portfolio of hotels sold include Inn on Lake Superior; Edgewater Resort and Waterpark; Day’s Inn Lakewalk; and the Best Western Downtown Motel in Duluth. In Superior, it includes Best Western Bridgeview, and in Ashland, the AmericInn. It also includes hotels in Michigan, Missouri, Kansas, Oklahoma, Arizona, Florida, Alabama and North Carolina.

ZMC’s newest hotel, the Hampton Inn & Suites in Hibbing, which opened after the properties were listed, was also included in the sale.

The purchase price for the hotels was not disclosed on Thursday.

Hall Equities Group, lead by CEO Mark Hall, is a large privately held real estate development and investment firm in Walnut Creek, Calif., whose holdings are largely on the West Coast.

“I was very pleased that we were able to strike a deal with Mark Hall,” Ken Goldfine said. “He’s smart and enthusiastic. He has great plans to grow the company, and I believe he will succeed at that.”

Calls to Hall from the News Tribune on Thursday seeking comment were not returned.

But according to Goldfine, Hall liked the way the ZMC Hotels’ management company had been running the hotels. So Hall also bought the management company in a second deal, whose sale price also wasn’t disclosed.

The ZMC name will continue and its offices will continue to be based at 2305 W. Superior St. in Duluth.

That was unexpected.

Goldfine expected the ZMC hotel management company would be shut down with the sale of the hotels.

“We’re very happy that he recognized the institutional knowledge and wanted to take advantage of it,” Goldfine said.

Despite the sale, little should change at the hotels, according to Goldfine. None of the hotels’ 1,200 jobs, including 500 in the Twin Ports, should be lost, from the general managers on down. ZMC Hotels’ senior management — president and Chief Financial Officer Todd Torvinen and Chief Operating Officer Jon Driscoll — will remain with the company.

“The day-to-day hotel business will go on, just like it has today,” Goldfine said. “The office, the hotels will continue. It’s just they have a new CEO.”

Hall will serve as ZMC’s new CEO.

While hotel jobs are safe, the accounting functions for ZMC Hotels will be moved to California in coming months, resulting in the elimination of one to two dozen jobs at the management office, Goldfine said.

Deal took eight months

The portfolio was listed for sale with a national broker in October. No asking price was listed. Rather, it was an offer-driven listing. The posting came at an opportune time — there was a national shortage of hotels amid increased demand.

The listing got a flurry of interest.

“We only concentrated on buyers interested in the entire portfolio,” Goldfine said. “During that time, we had numerous contacts from people who were interested in this group or this one hotel. But we never talked to them very seriously.”

Bids were narrowed down to the bid from Hall Equities Group. Negotiations started in January. In February, a purchase of sale agreement was signed. It was intensive due diligence ever since, said Goldfine.

While Hall didn’t return calls from the News Tribune, Goldfine said Hall wants to grow the company in the region.

“He wants more hotels,” Goldfine said. “He wants to build and buy additional hotels . And he wants to leverage the staff at ZMC to help him do that.”

That appears to include the Hampton Inn ZMC planned to build along Superior’s waterfront. Hall wants to follow through and build it, Goldfine said.

But for the Goldfine family, the sale of their hotels is bittersweet. The family hotel business was started in the 1970s by Ken Goldfine’s father, Monnie, and his uncle, Erwin, who were Duluth business legends, along with some partners. But the roots of the family business goes back to 1922, evolving from a feed and animal business to farm equipment to furniture to retail department stores to hotels.

Family members continue to be involved in local business, including manufacturing, real estate and retail.

“It will evolve into something new,” Goldfine said. “We’re still going to be here. We still have a presence here. This is just another chapter in our family’s business history.”