A few months ago, the Charleston Capitol Hotel was preparing for a $3 million renovation project.
On Thursday, that hotel and the Best Western Plaza Hotel beside it were sold at a trustees sale on the Kanawha County courthouse steps because the former owners defaulted on their loan.
The hotels' lender, the State Bank of Texas, purchased the Capitol Hotel via phone on Thursday for $3.15 million, and the Best Western for $3.85 million. There were no other bidders.
The purchase includes the hotels and the land they sit on, said Sushil Patel, executive vice president and chief lending officer at the Dallas-based bank.
After the previous owners of the hotels, Silver Creek Charleston A LLC, and Silver Creek Charleston B LLC, stopped making payments to their lender, the State Bank of Texas, "that's when we had to take collection action," Patel said.
"Our primary remedy as a lender is to foreclose on assets."
Patel would not say how much Silver Creek owed the bank or when it stopped making mortgage payments.
The Silver Creek LLCs, which formerly were known as Penta Charleston A and Penta Charleston B, have a listed address in Costa Mesa, California.
The hotels' day-to-day operations were being managed by CRU Property Management, which shares the same address as the Silver Creek LLCs.
Multiple calls made to CRU Property Management were unreturned.
Chris Rader, who is employed by CRU and is the general manager of the hotels, said he didn't know they were being sold or that the owners had defaulted on their loan.
"I know nothing about it," Rader said during a phone call Thursday. "I'm not even sure I have a job anymore."
In December, Hotel Sales Manager Stacy Rose sent out an email detailing the planned renovations for the Charleston Capitol and Best Western hotels.
The Capitol Hotel was to undergo upgrades to all its guest rooms, add a full-service bar and restaurant, and restore a 4,000-square-foot meeting space that had been boarded up.
The owners also had planned to rebrand the hotel to become the "Wyndham Garden Charleston Civic Center."
The Best Western upgrades included installing a new elevator and creating 10 new extended-stay king suites.
Patel said hotel operations will continue as is, for the time being, but the State Bank of Texas "would like to renovate the property and make it into a nationally known franchise."
One of the franchisees being considered is Wyndham Hotels and Resorts.
"The previous owner was talking with them, but now I'm the owner," Patel said. "We're opening up our own discussions with them."
While he wouldn't specify the market value of the properties, Patel said the amount Silver Creek owes the State Bank of Texas is "a lot more than what we bid in at the foreclosure."
According to newspaper archives, both hotels were last sold in 2007, for $5.1 million.
The privately owned State Bank of Texas specializes in lending to hotels around the country.
Reach Elaina Sauber at elaina.sauber@wvgazettemail.com, 304-348-3051 or follow @ElainaSauber on Twitter.