Landmark move: Hotel shell bids due in early June

As Williamsburg-area officials prepare one Halsey Minor mansion for sale and as the embattled internet financier himself tries to unload his San Francisco version of the Petit Trianon along with his sprawling Fox Ridge Farm in Western Albemarle, a moldering eyesore on the Charlottesville Downtown Mall joins the property parade. Bids are due soon in the auction of the unfinished Landmark hotel.

Planned as an upscale lodging by Minor and another mercurial Californian whose deal went south after it came east, the 11-story concrete shell of a structure has stood empty and unfinished for three years as liens and lawsuits raged.

We may not know the qualified bidders for a few more days, but as we first reported in March, one of them is likely to be Lee Danielson. The man who developed the Charlottesville Ice Park and Regal Cinema on the Downtown Mall before partnering with Minor on the Landmark, Danielson comes equipped, he has said, with financing from a billionaire named Alexander von Furstenberg.

Such backing could put Danielson in a strong position to reclaim the property, which has been taken away from its bankrupt owner, Minor Family Hotels LLC, a concern led by internet pioneer and Charlottesville native Halsey Minor. In March, federal bankruptcy judge William E. Anderson smiled as he decreed an auction with a minimum bid of $3 million to pay off the liens, which include about $135,000 in property taxes and over $2.8 million to contractors. (Any excess would go to the bank which claims a debt of over $13 million.)

If Danielson wins the auction, an ensuing transaction would mark the third time that a Danielson-related entity has owned the site. He first bought what was then a bank in 2000, promptly donated the across-the-street parking lot so Live Arts could build its new home, and then sold the site in 2006. The following year, Danielson led Minor to buy it. Minor, if he were commenting, might argue that Danielson led him astray.

Since construction stopped in early 2009, the two men have sparred via emails and lawyers from Atlanta to Charlottesville, with various wins and losses for each side along the way. Minor, in particular, has become a chronic litigant with devastating courtroom losses from Merrill Lynch and Sotheby's. Most recently, Minor has been branded a liar by a bankruptcy judge in Williamsburg, where he's been accused of ruining a treasured Colonial plantation called Carter's Grove.

As for the Landmark, it will cost $15-$18 million in new money to finish, according to Milwaukee-based hotelier Timothy James Dixon, who attempted to buy the property during an earlier phase of the bankruptcy proceedings. A UVA-based hotel expert, George Oversteet, says he's run the numbers and concluded that a buyer who keeps the total cost of purchase and completion under $20 million can profit at that site.

According to Danielson, now living in Southern California, the place has become a "ghost ship." And while he says he can't comment on his financial partners, Danielson will say that he doesn't expect too much competition at the auction.

"There's a lot of hair on the dog on this deal," says Danielson. "A lot of people don't want to touch it."

However, Bill Shmidheiser, a lawyer who represents a subcontractor holding a lien, says that he's heard of eight to 12 serious bidders, people who have taken the time to fill out the non-disclosure form to receive blueprints and financial data. Qualifications are due June 8 with the actual action occurring 10 days later.

"All indications are," says Shmidheiser, "that we're going to have a good competitive auction."
–additional photos added Tuesday, June 5 at 10:07am
–correction: Shmidheiser represents a subcontractor who does interior design; the original version of this story misstated the type of subcontractor


Who's going to trade that cow for the plate of beans; that's the question of the moment about this auction...

Better to turn this into the Museum of the Great Recession...