The Crowne Plaza Lexington — The Campbell House, one of Lexington's iconic hotels, is in default on its $21 million mortgage and will be sold at a Master Commissioner sale on May 23 in the Fayette County Circuit Courthouse.
Circuit Judge Pamela Goodwine awarded a judgment against the owners and on April 28 ordered the property sold to pay the lender, JPMorgan Chase, of Atlanta.
The hotel is owned by Thoroughbred Campbell House LLC. The property is assessed at $9.25 million by the Fayette County Property Valuation Administration for the purpose of determining property taxes.
James Williams, a Louisville attorney representing JPMorgan Chase, said action against the owners has been pending for about a year.
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The Campbell House, at 1375 South Broadway, was sold in October 2002, by longtime owner Kilbern Cormney to Stephen Dawahare and Joe Montgomery. Dawahare said he sold almost all of his interest in the hotel in 2006 and has not been involved with its operation since that time.
After a $10 million renovation in 2004, the name of the hotel was changed to Crowne Plaza Lexington. The hotel has 287 rooms and 26 suites in its main building, a swimming pool and a dining room.
Efforts to reach Montgomery on Tuesday were unsuccessful.
Attorney Scott Mattmiller, who represents the Thoroughbred Campbell House LLC, said Montgomery is the majority owner. In a statement Tuesday afternoon, Mattmiller said the owners "have enjoyed the last seven years, restoring and operating this Lexington icon.
"Unfortunately, the hotel market continues to struggle in the current economic environment ... There are certain economic realities to be considered in determining whether the project continues to be a feasible investment."
The statement said the owners have negotiated a settlement with the lender that provides for an orderly continuation of the business, and that the hotel will continue in operation.
Caroline Counihan, spokeswoman for Crowne Plaza corporate headquarters in Atlanta, said in a statement it would be inappropriate for the company to comment on the financial position of any of its franchisees. "In general, we are aware of these situations when they arise and understand that this can occur given the economic market. We will continue to work closely with any of our franchisees as they work through their specific situation."
The Campbell House was built in 1951 by Ralph Campbell.
On Tuesday, Lil Press, who was having lunch with a former business associate, expressed sadness when told of the pending sale. "I hope it's sold to a good company, because I think it is good for this end of town," she said.
Press schedules lunch meetings at the Campbell House when she does not want to be disturbed by loud noise. The dining room, she said, "is quietly elegant, and you have a choice of good food."
Pat Current, who also came to the hotel for lunch Tuesday, was also disappointed to hear of the sale, recalling that the Campbell House "in its day was a classy place. It was the place to go."
Current smiled as she said, "When my husband and I were dating, he brought me here to impress me."
Her friend Martha Perkins nodded to the fountain surrounded by a garden in front of the entrance, saying, "See how beautiful that is. This has always been a lovely place. What would we do without it?"