SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): November 27, 1996
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Hudson Hotels Corporation
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(Exact Name of Registrant as Specified in Charter)
New York 33-26780-NY 16-1312167
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(State or Other Jurisdiction (Commission File (IRS Employer
of Incorporation) Number) Identification No.)
One Airport Way, Suite 200, Rochester, New York 14624
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (716)-436-6000
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(Former Name or Founder Address, if Changed Since Last Report)
Item 2. Acquisition or Disposition of Assets.
On November 17, 1996, the Company acquired 12 hotel properties, consisting
of 8 Fairfield Inns by Marriott(R) and 4 Cricket Inns, from SB Motel Corp., a
subsidiary of Salomon Brothers Inc. and the subsidiaries of SB Motel Corp. which
had been formed to hold each such hotel, pursuant to an Agreement of Purchase
and Sale dated September 27, 1996 among the Company and its subsidiary, Hudson
Hotels Properties Corp. as Purchaser and SB Motel Albany Corp., SB Motel
Charleston Corp., SB Motel Richmond Corp., SB Motel Durham-Research Triangle
Park Corp., SB Motel Cary Corp., SB Motel Statesville Corp., SB Motel Wilmington
Corp., SB Motel Columbia Corp., SB Motel Virginia Beach Corp., SB Motel
Durham-Duke Corp., SB Motel Raleigh Corp., and SB Motel Charlotte I-85 Corp.
(the subsidiaries of SB Motel Corp. which held each property ) (the Sellers).
The Company acquired eleven of the properties into its newly-formed subsidiary,
HH Properties - I, Inc., and the twelfth, the Virginia Beach Cricket Inn, into
its newly formed subsidiary, HH Properties VB, Inc.
The purchase price for the properties was $60,400,000, determined by
arms-length negotiation with the Sellers, after analysis and valuation by the
Company based upon historic and projected operating results of the properties.
The purchase price was paid by issuing 370,657 shares of Company common stock,
valued at $2,400,000, by issuing the Company's subordinated promissory note in
the amount of $3,000,000 (maturing November 27, 1997) to the Seller, and by
paying the balance of $55,000,000 in cash. The cash portion of the purchase
price was obtained a) by placing a $37,470,000 mortgage issued by Nomura
Asset Capital Corporation, on the properties purchased by HH Properties - I,
Inc. b) by the Company securing $17,000,000 of mezzanine financing from Nomura
Asset Capital Corporation, and c) by the Company utilizing $530,000 of its
available capital.
There were no material relationships between the Company and the Seller
prior to the consummation of the acquisition. As a result of the acquisition, SB
Motel Corp. became a greater than 5% shareholder in the Company, and John Buza,
an officer of the Seller, became a director of the Company.
In addition to the consideration stated above, the Company has agreed to
register the 370,657 shares issued to SB Motel Corp. for sale to the public
within 180 days following closing, and the Company has granted to Salomon
Brothers, Inc a right of first refusal to undertake equity offerings on behalf
of the Company.
The following properties were acquired. Each such property was operated as
a hotel prior to the acquisition, and the Company intends to continue to operate
each property as a hotel thereafter.
Fairfield Inn by Marriott(R) in Albany, Georgia. The Albany Fairfield Inn
by Marriott consists of two, 2-story exterior corridor buildings with 122 rooms.
The Property was opened in July 1982 and was renovated and re-branded as a
Fairfield Inn by Marriott in September 1994. The hotel is located 1/8 mile off
business route U.S. 19 north and approximately 1/4 mile from the Liberty
Expressway on North Slappey Boulevard in Albany, Georgia. Slappey Boulevard is
the primary north-south traffic artery through Albany and is lined by commercial
establishments including hotels, restaurants, gas stations and shopping centers.
Liberty Expressway allows easy commuting around Albany. The Fairfield Inn by
Marriott enjoys excellent visibility with prominent signage on both U.S. 19 and
82, and Slappey Boulevard. In addition, despite its location in a thriving
commercial area, the Property's site is park-like with mature trees and
plantings.
Fairfield Inn by Marriott(R) in Cary, North Carolina. The Cary Fairfield
Inn consists of two, 2-story, guest room buildings and one, 1-story building
housing the reception area. The 125-room exterior corridor hotel was opened in
April 1986 and was renovated and rebranded as a Fairfield Inn by Marriott(R) in
June 1994. The Hotel is located at the intersection of U.S. 64 and Walnut Street
and 3/4 miles west of the I-40 interchange in Cary, North Carolina. This
intersection is only 3/4 mile west of the I-40 interchange making the Property's
access to the primary traffic routes in the area excellent. U.S. 64 is a major
highway providing easy access to virtually every community within the
Raleigh-Durham metropolitan area. The predominantly commercial area surrounding
the Property includes retail development, motor services, restaurants and
lodging facilities.
Cary is located to the east of Raleigh between I-40 and U.S. 1/64. Cary is
the fastest growing city in Wake County; its growth is fueled by its proximity
and accessibility to the major employment centers in the area. These include
Research Triangle Park, Regency Park, and the Raleigh-Durham Airport area and
downtown Raleigh.
The Fairfield Inn by Marriott(R) in Charleston, South Carolina. The
Charleston Fairfield Inn consists of two, 2-story exterior corridor buildings
with 119 guest rooms. The Property was opened in 1985 and was renovated and
re-branded as a Fairfield Inn by Marriott(R) in July 1994. Additional land is
available at this site to accommodate approximately 50-60 additional guest
units.
The Property is located in the northwest quadrant of I-26 and Ashley
Phosphate Road on Northside Drive in Charleston, South Carolina. I-26 is the
major highway that links downtown Charleston to Columbia and Greenville, South
Carolina. It also provides direct access to the Charleston International Airport
which is only five minutes from the Property. Ashley Phosphate Road is an
important east-west artery providing access to I-26 and is lined by
commercial/travel related uses including restaurants, hotels, gas stations,
shopping centers and business offices. The Property has excellent visibility
from both Ashley Phosphate Road and Northside Drive.
The Fairfield Inn by Marriott(R) in Columbia, South Carolina. The Columbia
Fairfield Inn consists of two, 2-story, external corridor structures with 129
guest rooms. The hotel opened in 1988 and was renovated and re-branded as a
Fairfield Inn by Marriott(R) in August 1994. The hotel is located at the
intersection of I-77 and Two Notch Road and approximately .5 miles from I-20 to
the southwest. The Property is located in the southeast quadrant of the I-77 and
Two Notch Road intersection. The area, known as the "Two Notch" area, is the
location of much of the growth in the city. The Area contains South Carolina's
largest shopping mall as well as a number of small retail establishments and
companies. I-77, a major north-south highway, links Cleveland, Ohio with
Columbia, South Carolina and is one of the most heavily traveled tourist and
commercial routes in the eastern United States. The Property is also in close
proximity to I-20, a major east-west highway. The Property enjoys excellent
access and visibility from I-77 and displays prominent signage on I-77. The
Fairfield Inn by Marriott is approximately three miles north of the Fort Jackson
Army Base, which is a major market force for the immediate area. The Property is
nine miles northeast of downtown Columbia.
The Fairfield Inn by Marriott(R) in Durham-Research Triangle Park, North
Carolina. The Durham-Research Triangle Park Fairfield Inn consists of one,
3-story structure with 96 guest rooms. Unique in its design, the Property
utilizes exterior hallways on the first floor and interior hallways on the upper
floors. The hotel was opened in march 1987 and was renovated and re-branded as a
Fairfield Inn by Marriott(R) in July 1994. The hotel is located at the
intersection of NC Highway 55 and I-40 located right on the edge of Research
Triangle Park (RTP), the nation's largest planned research and development park.
RTP is the largest research park in the United States with over 70 research,
development and professional organizations. In addition, the hotel is only six
miles from the Raleigh-Durham International Airport and only seven miles from
downtown Durham and Duke University. Across the street from the Property is the
Meridian Office Park which contains number of companies. Prominent among these
is BASF Chemicals. It along with other companies in the park, generate demand
for the area.
The Fairfield Inn by Marriott(R) in Richmond, Virginia. The Richmond
Fairfield Inn consists of two, 2-story guest room buildings. The 124-room
exterior corridor hotel was opened in August 1987 and was renovated and
re-branded as a Fairfield Inn by Marriott(R) in July 1994. The hotel is located
on West Broad Street, less than a mile west of I-64 and three miles from I-95 in
Richmond, Virginia. The Property is located in Richmond, Virginia which is
approximately 93 miles northwest of Norfolk and approximately 110 miles from
Washington, D.C. Its excellent access to these major thoroughfares is very
attractive to both business travelers and tourists. The location's desirability
is further heightened by its proximity to both downtown Richmond, only eight
miles away, and the Richmond International Airport, 15 miles away. The Property
also enjoys excellent proximity to Richmond's major office parks (Brookfield,
Paragon Place, Innsbrook and the Koger Office Parks). In addition, Motorola
announced in 1995 plans to open a new semi-conductor plant in the Goochland
area, approximately 20 miles Northwest of the Property. This plant will create
5,000 jobs and be an excellent demand generator in the Richmond market.
The Fairfield Inn by Marriott(R) in Statesville, North Carolina. The
Statesville Fairfield Inn consists of three, 2-story guest room buildings. The
118-room exterior corridor hotel was opened in 1985 and was renovated and
re-branded as a Fairfield Inn by Marriott(R) in August 1994. The hotel has a
prime location off I-77, approximately three miles south of the I-77/I-40
interchange in Statesville, South Carolina. Statesville, North Carolina is
located approximately one hour north of Charlotte and approximately one and a
half hours west of the Raleigh and Durham area. The city is strategically well
located at the confluence of the region's two interstate highways, I-40 and
I-77, which provide convenient access to areas throughout the region. I-77, a
major north-south highway, links Cleveland, Ohio with Charleston, South Carolina
and is one of the most heavily traveled tourist and commercial routes in the
eastern United
States. The Property enjoys excellent access and visibility off I-77 and
displays prominent signage on I-77. The Property is approximately three miles
south of the I-77/I-40 interchange and is located in a shopping mall with
approximately 20 retail stores, fast food restaurants and a movie theater.
This Property is subject to a ground lease which expires April 30, 2035.
The annual rental payment is the greater of i) $22,000 less 1/2% of gross room
rentals from the hotel during the 1991 lease year of the lease term, or ii) four
percent of the gross room rentals from the hotel during each lease year, which
is most likely given the Property's performance.
The Fairfield Inn by Marriott(R) in Wilmington, North Carolina. The
Wilmington Fairfield Inn consists of two, 2-story guest room buildings. The
120-room exterior corridor hotel was opened in April 1985 and was renovated and
re-branded as a Fairfield Inn by Marriott(R) in July 1994. The hotel has a prime
location on U.S. Highways 17/74 (Market Street) and 3/4 miles west of I-40 in
Wilmington, North Carolina. Wilmington is located in southeastern North Carolina
on the coast just above the South Carolina border. Wilmington's location between
the Cape Fear River and the Atlantic Ocean, and along the intracoastal waterway
has been a consistent source of lodging demand. Commercial development,
including restaurants, lodging facilities and gas stations line Market Street.
The Property enjoys excellent access and visibility off Market Street and
displays four prominent billboards along the highway. The hotel is located eight
miles from Wrightsville Beach and four miles from historic downtown Wilmington.
Famous gardens, plantations, beaches, and world class golf is only a short drive
from the hotel. The hotel is only 7 minutes from the new Hanover International
Airport.
The Cricket Inn in Charlotte (I-85), North Carolina. The Charlotte I-85
Cricket Inn consists of three, 2-story exterior corridor structures with 132
guest rooms. The Property opened in March 1989 and was completely renovated in
August 1995. The hotel is located at the Sugar Creek Road Exit off I-85 and is
approximately three miles from I-77 and Charlotte, North Carolina. I-85 is a
major north-south highway, which is one of the two major roadways that provide
access to Charlotte, North Carolina. The predominately commercial intersection
has heavy traffic and contains several competing hotels, fast food outlets and
full service restaurants. The Property allows guests easy access from the
interstate and displays prominent billboards along I-85. Charlotte International
Airport is approximately 10 miles from the Property and is accessible by I-85.
The Cricket Inn in Durham-Duke, North Carolina. The Durham-Duke Cricket
Inn consists of an eight-story tower (opened in 1985) and a five-story building
(opened in 1988) both with interior corridors and elevators. The eight story
tower, which received a $1 million renovation in June 1995, contains 118 guest
rooms and a coffee shop which seats 38. The five story building contains 32
guest rooms. The hotel is located just two blocks from Duke University and the
Duke University Medical Center and across the street from the Veterans
Administration ("VA") Medical Center in Durham, North Carolina. Lodging demand
is enhanced by the completion of a 40-room geriatric ward at the VA Medical
Center and 76-room eye care center at the Duke Medical Center. The Property is
located in the northwest quadrant of Elba and Fulton Street in Durham. The
Property is one block from the Durham Freeway, which provides access to I-40.
I-85 is approximately one mile from the hotel.
The Cricket Inn in Raleigh, North Carolina. The Raleigh Cricket Inn
consists of three, 2-story, external corridor structures with 148 guest rooms.
Raleigh is part of a three city metropolitan area known as the Research Triangle
(which in addition to Raleigh includes the cities of Durham and Chapel Hill).
Old Wake Forest Road leads directly into the heart of downtown Raleigh which is
only four miles away. Several colleges and universities, including North
Carolina State University, and the State Capitol are located in the downtown
area. I-440 connects with U.S. Highway 70 and I-40 which provide excellent
access to the Research Triangle Park, the nation's largest planned research and
development park, and the Raleigh-Durham International Airport, both of which
are less than 30 minutes away.
The Cricket Inn in Virginia Beach, Virginia. The Virginia Beach Cricket
Inn consists of three, 2-story external corridor structures with 150 guest
rooms. Two buildings contain only guest rooms and are perpendicular to one
another in an "L" shape. The third building contains guest rooms and the lobby
and front desk area. The Property opened in 1986 and was completely renovated in
August 1995. The hotel is located on U.S. Route 13 (Northampton Boulevard) and
approximately .67 mile east of I-64 in Virginia Beach, Virginia. I-64 is a major
east/west highway which is the primary tourist access road for the beach
resorts. The hotel has excellent access from both Route 13 and I-64. The
Property is 10 miles west of the resort beaches, four miles south of Norfolk
International Airport and four miles southeast of the Little Creek Naval
Amphibious Base (one of the four military bases in Virginia Beach) which employs
over 12,200 employees.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Hudson Hotels Corporation
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(Registrant)
Date: December 12, 1996 /s/ Taras Kolcio
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Taras Kolcio, Chief Financial Officer
Item 7. Financial Statements, Pro Forma, Financial Information and Exhibits.
a) Financial Statements of Businesses Acquired.
It is impracticable to provide the required financial statements for the
properties acquired at this time. The required financial statements will be
filed as soon as practicable, but not later than sixty days after this report is
filed.
b) Pro Forma Financial Information.
It is impracticable to provide the pro forma financial information which
is required with respect to the acquisitions described in Item 2 above. The
required pro forma financial information will be filed as soon as practicable,
but not later than sixty days after this report is filed.
c) Exhibits.
Exhibit 10. Material Contracts
Exhibit 10.30 Agreement of Purchase and Sale, as amended.