ST. CHARLES – The owners of one of the Tri-Cities' most iconic hotels believe they are near a deal to end a foreclosure suit brought against them by a lender.
Since April, owners of the Pheasant Run Resort and representatives of the lender, CWCapital LLC, of Needham, Mass., have discussed reworking a $29 million loan.
The loan, which had been made to Pheasant Run in November 2006, became the subject of a foreclosure action brought by CWCapital in July. At that time, CWCapital and US Bank, the financial institution that serves as trustee for the loan, alleged that Pheasant Run's owners had defaulted on the loan, as they had not made any of its pledged monthly payments since April, according to court documents.
In the court filing, CWCapital said Pheasant Run still owed more than $28.5 million on July 1, and default monthly payments of $3,802 per diem continued to mount.
On July 21, CWCapital asked a judge to transfer management of the property to a receiver company, a third-party hotel operator, which would be empowered to continue operating the resort and facilitate a sale of Pheasant Run at the direction of the lenders.
The court has not ruled on that request, and it is still pending.
However, David McArdle, president of Pheasant Run's parent company, Oak Brook Companies, said the foreclosure suit does not portend the end of Pheasant Run.
The St. Charles-based Oak Brook Companies owns and operates Pheasant Run, as well as two other hotels in St. Charles and a hotel in Cleveland.
McArdle said Oak Brook Companies and CWCapital have been talking for months about restructuring the terms of the loan "to lower the amount of the monthly payments to be more in line with the economic times."
"The state of the hotel business has been not good for anybody in the Chicago area," McArdle said. "But Pheasant Run is not closing, nor has the lender ever suggested that."
According to a report in Crain's Chicago Business, Pheasant Run's revenue has fallen 32 percent since 2007 and the hotel operated at a $515,000 deficit last year before interest payments and capital expenditures.
Crain's reported that the resort was appraised in June at $16.8 million, much less than the $28.5 million still owed on the loan.
McArdle said he believed the two sides will reach a deal to resolve the matter "in a week or two."
The McArdle family has owned and operated Pheasant Run since it was founded in 1963 by David's father, Edward McArdle.
