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The Northern Hotel, sitting on a prime and now unused corner of downtown Billings, will be sold Friday at a 10 a.m. foreclosure auction.

"There is interest in the property," said Crowley Law Firm attorney Bill Lamdin, who represents Northern Hotel Holdings LLC, a group of doctors and dentists from northwestern Montana that is the lender. The group foreclosed Aug. 6 after the current owner, Hassan Kangarloo of San Francisco and his companies, missed payments.

Half a dozen people have called about the property in the past six months, Lamdin said, but he didn't know who might show up at the sale in the lobby of the Yellowstone County Courthouse.

Kangarloo and his companies purchased the hotel in May 2007, promising to spend $10 million to restore and reopen what had been a landmark hotel in Billings. Instead, he defaulted on his $2 million loan, hasn't responded to the foreclosure notice and doesn't appear to be ready to redeem his debt, Lamdin said.

"It is highly unlikely he'd be paying off this hotel," he said. "It's a bit of a mystery. I can only assume he doesn't have the capacity to address this issue."

Kangarloo did not return calls for comment.

In 2002, the same Montana lenders sold the hotel at the corner of North Broadway and First Avenue North to Robert and Susan Van Riper of South Dakota and their company, the Yellowstone Hotel Group. After the Van Ripers defaulted on their loans, Northern Hotel Holdings bought the hotel back at a foreclosure sale in February 2007. Four months later, the investment company sold the hotel to Kangarloo.

The hotel has been shuttered since September 2006, and the adjoining parking garage also sits unused.

Contact Jan Falstad at jfalstad@billingsgazette.com or 657-1306.

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