Boston's Ritz-Carlton Isn't Sold
Feb. 05, 1998
BOSTON (AP) _ The Ritz-Carlton Hotel, a city landmark that overlooks Boston Common and is just a jaunt from staid Beacon Hill, remains in the hands of the Waffle King despite an auction Wednesday.
Top hotel investors gathered at a Boston law office to see if they could pocket the venerable hotel, which sits across from the oldest outdoor garden in the United States.
The opening price of $50 million was met with silence.
``You're buying a piece of history,'' said auctioneer Paul Saperstein, in an attempt to kick start the bidding's slow start.
When it ended, an owner's group involving William B. Johnson, an Atlanta entrepreneur who made his money developing Waffle House restaurants, remained the owner.
The New York investment group that already owns two Boston hotels bought the mortgage on the Ritz from a Japanese banking group that said it was owed $214 million by the Johnson group.
``We're fairly bullish on the Boston hotel market and Boston in general,'' said John Kukral, senior managing director of The Blackstone Group, which bought the mortgage for $75 million.
The auction of the circa 1920s hotel, which is across the street from the ponds and swan boats of the Public Garden, was eyed by many who consider the Ritz the finest hotel in Boston.
Touted as a ``crown jewel'' by the auctioneer, the hotel was the very first of 33 Ritz hotels opened throughout the world, the latest in Shanghai. A night's stay at the 275-room hotel runs at least $280, up to $2,000 for the presidential suite.
Blackstone, which owns Boston's Four Seasons Hotel and the Swissotel, replaced Sumitomo Bank of Japan as lender in an auction precipitated by the Johnson group's failure to make a mortgage payment in three years.
Kukral said Blackstone will now work with Johnson and his associates to restructure the debt.
Observers say the property was over-financed in the late 1980s, despite the booming Boston economy and high hotel vacancy rates.
John J. Roche, senior vice president for the Tara Hotels, said it still appeared to be deep in debt today.
``But it's still a great hotel and a great location,'' he said.