After being closed in 1996 and then put up for sale in 1997, the St. Croix by the Sea Hotel was sold at auction Monday for $700,000.
The 65-room hotel in Estate St. John was purchased at a bankruptcy auction by J.R. Neal, said John Ellis, the bankruptcy trustee who conducted the bidding in District Court.
Neal, one of nine bidders, couldn’t be reached for comment on Tuesday. He was quoted in published reports as saying he would open the hotel after making major repairs.
Ellis said the winning bid of $700,000 was reasonable. The property overlooks the Caribbean Sea, but the hotel, built by Erik Lawaetz some 45 years ago, needs several million dollars worth of repairs.
"It’s ocean-front property on a Caribbean Island," Ellis said, "but the hotel is in severe disrepair. It was a bankruptcy thing. So it was going to bring what it was going to bring."
Lawaetz, now 85 years old, said he closed St. Croix by the Sea in 1996 and then put it on the market the next year for $3.3 million. There being no buyers, he subsequently filed for bankruptcy. He said he would have liked to have seen a high bid in the area if $2 million.
"I feel badly that it didn’t go for more, because it would have taken care of the creditors," he said. "I’m not sure it’s over yet."
Ellis said about $3 million is owed to various individuals, companies and taxing authorities.
"They had filed for bankruptcy and they hadn’t done anything," Ellis said. "So the court appointed me to turn everything to cash that goes to pay creditors."
Had the auction been advertised better, Lawaetz said, a higher successful bid could have been commanded.
Ellis, however, said he spent $8,000 on national and local newspaper advertising in June and July, including on the Internet. He said many prospective bidders were even notified personally of the auction.
"People had the opportunity to get their game plans together," he said. "A lot of people who were notified didn’t show up because they said the numbers didn’t work."
Lawaetz said the decline of the hotel began around 1975 when the government built low-income housing next to his property. Hurricanes also did some damage, he said.
But Lawaetz said he doesn’t foresee the new owner facing the difficulties that he did, because the public housing has been renovated and a wall now separates the properties.
