Clarion Hotel set for sheriff’s auction

CEDAR RAPIDS - One of the oldest hotels in Cedar Rapids will be sold at a Feb. 3 sheriff's auction to satisfy a $4.5 million mortgage default.

The Clarion Hotel & Convention Center, 525 33rd Ave. SW, is owned by Synergy Hotel Group of Glenwood, Md. It was constructed in 1976 by Zazza Ltd. as a Sheraton Inn and kicked off what became 'motel row” on 33rd Avenue SW.

Synergy, which filed for Chapter 11 bankruptcy in August, bought the Clarion in 2007 from Zazza Ltd., owned by the late Jack Zazza and his family. Synergy, owned by Fritsch Family of Partners LLC, has a $4.5 million first mortgage held by Citizens Bank of Elizabethton, Tenn.

The Clarion, which has about 100 full- and part-time employees, is operating in bank receivership. Calls seeking comment were unreturned by Citizens Bank, which is expected to purchase the hotel at the Feb, 3 auction to protect its secured investment.

The Clarion has a storied history, with the University of Iowa regularly housing its football players as well as opposing team players at the hotel before games.

The 157-room hotel was the first hotel of significant size to be built after the Roosevelt Hotel was constructed in 1926 in downtown Cedar Rapids.

Synergy's 33-page filing in U.S. Bankruptcy Court for the Northern District of Iowa lists assets of $3.8 million and liabilities of $8.8 million, including $7.9 million of secured claims and $900,000 of unsecured claims.

In addition to the Citizens Bank first mortgage, the U.S. Small Business Administration holds a second mortgage for $1.8 million, and Zazza Ltd. holds a third mortgage for $1.3 million.

Calls to Charlie Fritsch, managing partner of Synergy Hotel Group and president of MDA Hotel Brokers in Glenwood, Md., were not returned Thursday,

Attorney Laurie Dawley of Shuttleworth & Ingersoll, who is representing Citizens Bank, also could not be reached for comment.