BY KEITH BENMAN, Times of Northwest Indiana
kbenman@nwitimes.com
The nationwide hotel empire founded by Crown Point billionaire Dean White is up for sale, including the Radisson Hotel at Star Plaza and other hotels in downtown Chicago.
In addition to the Radisson, 10 other hotels in Northwest Indiana are part of the portfolio of White Lodging Services Corp. The company is headed by Dean White's son, Bruce.
There are at least "six or seven" suitors interested in White Lodging Services' properties, according to Bill Wellman, a vice president at Whiteco Industries, a Dean White company that was the parent of White Lodging Services for many years.
Ownership of the hotels would change, but White Lodging Services would continue to manage them, Wellman said. Whiteco Industries' Star Plaza Theatre is not part of the sale, Wellman added.
"I don't think it will change any of the business in Lake County," Wellman said. "It won't be even a hiccup."
What's for sale is Dean and Bruce White's equity stakes in 87 hotels, as well as those of other partners, said Judy Bronowski, White Lodging Services vice president of strategic planning and marketing.
"White Lodging as a management company is not for sale," Bronowski said. "It's a strategy to fuel liquidity."
White Lodging Services will continue to grow, she said. Thirty-five projects under construction are not part of the sale, she added.
The potential sale of the hotels was the subject of widespread speculation in the industry Tuesday. Many of the hotels are in prime downtown locations in cities such as Indianapolis; Denver; Boulder, Colo.; and Austin, Texas.
Bruce White told Crain's Chicago Business the 87 hotels definitely will fetch something "north of" $1.6 billion. White Lodgings Services' Web site says Bruce White "has developed hotels in excess of $500 million."
More than 80 of the 87 properties for sale are Marriott hotels of various types, including Residence Inns and Courtyards.
"The company's long-standing relationship with Marriott is one that many companies have tried to duplicate and few have been as successful as White," said Jeff Higley, editor-in-chief of Hotel & Motel Management magazine.
This has been the biggest year for acquisitions in the hotel industry since 2001, with low interest rates and rising room rates fueling the surge, Higley said.
The White Lodging Services hotels are what is known as "limited-service" or select-service hotels with top-notch reputations for quality, Higley said.
White Lodging Services is a leading hotel operator in Indiana and it would be a huge loss for the state if control of the hotels went to an out-of-state buyer, according to David Gayes, executive vice president of the Indiana Hotel and Lodging Association.
"We regret anytime we lose Indiana businesses or companies," Gayes said. "Their headquarters are in Indiana and it's sad anytime an Indiana business leaves the state."
However, Gayes noted he had no first-hand knowledge of the potential sale or what future plans White Lodging Services might have.
This year, Dean White was tied for 507th on Forbes magazine's list of the world's billionaires with an estimated fortune of $1.3 billion. He tied for that spot with 19 others, including Oprah Winfrey.
He still maintains an ownership stake in many White Lodging Services hotels, although that company is now a wholly separate company from his Whiteco Industries, Wellman said.
Bruce White, who is both chairman and chief executive officer of White Lodging Services, splits his time between Merrillville and Edwards, Colo. In March, Gov. Mitch Daniels appointed him to the board of the Indiana Economic Development Corp.
Bruce White maintains an equity stake in the majority of the company's hotels, according to the company's Web site.
There is broad speculation on who might buy the hotels, with various real estate investment trusts among the leading candidates. One candidate for biting off a large chunk of the White Lodging Services properties is Memphis-based Equity Inns, which has 115 hotels in 34 states in its portfolio.
New York-based investment firm Goldman Sachs & Co. and Dallas-based Hicks Muse Tate and Furst Inc. also have been acquiring hotels of late, according to Crain's.
A sale to big investors should have little effect locally, according to Speros Batistatos, president and chief executive officer of the Lake County Convention & Visitors Bureau.
"My understanding of the situation is White Lodging Services is looking to restructure some holdings and still manage all the properties," Batistatos said. "So the net effect for us is no change."
White Lodging Services hotels are among the largest contributors to the Lake County Convention & Visitors Bureau through the county's hotel bed tax.
Whiteco Industries began in the Lake County agricultural hamlet of Shelby 70 years ago. The company made billboards and was founded by the late George White and Joe DeKindern.
Today, Whiteco Industries owns Celebration Station, a chain of family entertainment centers; Whiteco Residential, a developer of apartment communities; Morningside, a private gated community in Crown Point; and a company that tracks billboard lighting by satellite.
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