The former Hilton is headed out of bankruptcy, and the new owner is offering a house-warming gift to the city -- completion of a long-stalled construction project at the hotel's front door.
Kiran C. Patel, a Tampa, Fla., cardiologist, secured ownership of the Downtown hotel Thursday when U.S. Bankruptcy Judge Jeffery A. Deller gave verbal approval confirming his plan to reorganize the troubled property.
The decision completes a "long, painful" odyssey by Dr. Patel to gain control over the hotel, now known as the Wyndham Grand Pittsburgh, after it was forced into bankruptcy in September by lender BlackRock Financial Management Inc.
"Relieved. Thank God, I say," he said when asked how he felt about his plan being confirmed.
As a first order of business, Dr. Patel vowed to complete the unfinished exterior addition that has been a blight on the Downtown skyline for two years. The work stopped when contractor P.J. Dick walked off the job when it wasn't paid.
"Hopefully the eyesore for Pittsburgh will be gone," Dr. Patel said.
He pledged to "do my part" to bring the property back to prominence after it hit rock bottom with the bankruptcy under former owner Shubh Hotels Pittsburgh.
The hotel will get an indoor pool, a spa, more convention space and a new restaurant as part of property renovations. "It will be much, much better," Dr. Patel said.
But he also called on the city and local tourism groups to work hard to promote the hotel. "I am here by accident, not by design," he said. "Whatever we are doing should be of value to the city."
Ownership did not come cheaply for Dr. Patel. By his own estimate, he is sinking $15 million in cash or guarantees into the plan to reorganize the hotel. That's on top of more than $4 million in loans he gave to the former owner to help keep the hotel afloat during its financial struggles.
As part of a deal with BlackRock, Dr. Patel will pay a $10 million "settlement fee" that will be used to reduce the $49.6 million mortgage on the property. Payments to vendors and other contractors to settle claims for money owed will run at least another $3 million to $4 million.
"This is a victory for creditors," said David Lampl, attorney for the committee of unsecured creditors. "It's certainly a much better result than anyone could have anticipated at the filing of the case."
An end to the case seemed unlikely several months ago as BlackRock and Dr. Patel battled for control over Downtown's largest hotel, with more than 700 rooms.
For months, the case was filled with charges and countercharges, lawsuits and animosity, necessitating the appointment of a trustee to oversee hotel operations. However, the tide changed in a mediation that produced the deal between Dr. Patel and BlackRock.
David Rudov, the attorney who helped to craft Dr. Patel's plan and lobbied for mediation, said he and co-counsel Scott Hare always believed the case would reach this point.
"I think I told the judge at the very first hearing that we had an exit strategy and it manifested itself today," he said.
Judge Deller gave his assent to the plan after Dr. Patel and his attorneys reached last-minute settlements with several parties with contested claims, including P.J. Dick and Hilton Hotels & Resorts, which removed its name from the property in September.
Dr. Patel also won a victory when Judge Deller denied for balloting purposes $17 million in claims filed by former hotel owner Atul Bisaria and former asset manager Jai Lalwani.
As part of the reorganization, Dr. Patel will contribute $1 million to the exterior construction. Another $1.7 million will come from a BlackRock-controlled reserve fund.
Frank Amedia, the hotel's asset manager, said he hopes to start ramping up construction within the next 10 days. Design work will be done first to address some "anomalies." After that, exterior work will be bid.
He hopes to have all the work finished within 10 months.
Mr. Amedia also is looking to have an inside staircase to ballrooms on the second floor finished in 120 days. The hotel has been without the staircase for some time.
However, one thing no one will see just yet is a Wyndham sign at the prominent spot at the very top of the hotel.
While officials are ready to replace the longtime Hilton sign, which was removed after Hilton canceled its franchise agreement last fall, the city has ruled the hotel must first go through its planning and zoning processes. That could take months.
Meanwhile, business at the hotel has been improving. After fighting for nearly a year to own the hotel, Dr. Patel finally would like to start reaping some of the rewards.
"The lawyers are the winners so far. Now maybe it's my turn," he said.
Mark Belko: firstname.lastname@example.org or 412-263-1262.