URBANA — The historic Landmark Hotel is expected to sell for $100,000 less than expected after the top bidder in last month's auction failed to place a 10 percent deposit.
Las Vegas-based real-estate firm JWM Ventures LLC bid $1.3 million for the Urbana hotel in September.
"We kind of threw them out," said Rick George, a Chicago-based broker with the firm Avison Young. They had "24 hours to put their nonrefundable deposit of 10 percent up in escrow. They did not do that.
"We gave them a week. Then by the time a week rolled around, it became clear they were full of" it.
So the hotel's owner, Xiao Jin Yuan, along with the auction company Ten-X, terminated the contract, George said, and Yuan selected the second-place bid of $1.2 million.
"They're very capable, very sound, very experienced in historic preservation," George said of the new buyers, declining to name the bidder until the sale closes Nov. 13. "These guys know what they're doing."
He's not sure what JWM was doing.
"I have no idea what they were trying to accomplish," George said, noting that JWM initially expressed excitement about the hotel. "We spent two days answering questions, drilling down on info, from tax credit processes to market info, and then they just went completely dark once they won the auction."
JWM did not return calls for comment from The News-Gazette.
Last month's auction followed another in December where bidding reached $3.95 million.
But that failed to meet Yuan's reserve price, thus the second auction.
George said Yuan is content with the new sale price.
"The seller is fine with $1.2 million," he said. "He's happy to get out of Dodge."
The Landmark Hotel has been closed since April 2016 and has been for sale since 2015, when Yuan had an asking price of $5.4 million.
He bought it in 2010 for $600,000 and renovated most of the rooms, but returned $1 million in incentives to the city after not reopening the hotel's restaurant and conference center.
The hotel opened in 1923 as the Urbana-Lincoln. It was later bought by Carson Pirie Scott & Co. in 1965, before being sold to the Jumer Hotel chain in the '70s.
It was sold again in 2001 and has cycled through various owners since then.