CLEVELAND, Ohio — The City of Cleveland has agreed to pay more than $12 million to terminate a long-term lease with the operators of the Sheraton Cleveland Airport Hotel, which is expected to be converted into additional parking for the airport.
The hotel’s short-term fate is unclear, although a woman answering the phone at the hotel on Thursday afternoon said it was closing on Tuesday.
Opened in 1959, the 243-room Sheraton is located on city-owned land adjacent to the Cleveland Hopkins International Airport terminal. His condition has deteriorated in recent years, due to a drop in travel caused by the pandemic and other factors.
The hotel’s owner, LN Hospitality, has faced mounting debt, foreclosures and lawsuits in recent years.
A proposed legal settlement reached this week asks the city-owned airport to pay $12.15 million to terminate the lease with LN Hospitality, which runs until 2048. The money would be used to pay off the airport’s debts. hotel, according to documents filed this week in the Cuyahoga County Court of Common Pleas.
Cleveland attorney Mark Rodio, who represents LN Hospitality, declined to comment on the pending settlement. John Goersmeyer, a spokesman for Cleveland Hopkins, also declined to comment until the deal is finalized.
The settlement, although accepted by all parties, is not considered final as the money has not been transferred.
The deal also sees the city acquiring the hotel’s 468-space parking lot, which is used for both overnight guests and airport parking.
The hotel was once a popular and convenient overnight location for flight crews and travelers before or after flights. However, since United Airlines closed its Cleveland hub in 2014, the need for an on-site airport hotel has diminished, while the need for more parking has increased, airport officials say.
Eventually, the hotel will likely be demolished and converted into a parking lot, though it’s unclear how long that process might take.
It’s also unclear whether the hotel’s closure next week is permanent or temporary. Although a local hotel employee on Thursday declined a request to book next week, the hotel’s online reservation system was still accepting reservations after June 1.
The court agreement asks LN to relinquish the property at 5 p.m. Tuesday.
The hotel employs less than 50 people, according to a source.
LN Hospitality Cleveland is a limited liability company with five California residents listed as members: Bharathbhai (Robert) Patel, Charles Patel, Reema Patel, Mahendra (Michael) Patel and Bhagyavati Patel.
LN has owned the hotel since 2015, when it purchased the building and parking lot lease for $12.5 million from Oakbrook Properties in Illinois. The lease on the property extends to 2048. The rent is $300,000 per year.
The hotel, including the building and land, is valued at $10.4 million, according to Cuyahoga County property records.
Simmons Bank, which loaned LN $12.5 million in 2018, sued LN in 2021 for default. The city was drawn into the litigation later in 2021.
Sheraton Cleveland Airport Hotel faces mounting debt, could be closed and turned into airport parking
Brown Lot at Cleveland Hopkins Airport reopens Saturday, at a higher price