In what key players called "a great day for Billings," two brothers who grew up in Billings paid nearly $2.5 million for the downtown Northern Hotel and parking garage during a foreclosure sale Friday and promised to bring the historic property back to life.
That's a promise two previous out-of-state owners also made before defaulting on their mortgages.
But Chris and Mike Nelson are locals who have a sense of Billings history and the financial clout to renovate the aging property.
"I've traveled the world, and Billings is the best town. It's a good place to be," said Chris Nelson, who lives in Bozeman. He runs Zoot Enterprises, which conducts rapid credit checks.
The Nelsons handed over a Stockman Bank check for $2,475,090 from Zoot Properties LLC to buy Northern properties. The brothers also agreed to pay an additional $262,604 in delinquent property taxes on the hotel and garage.
Many of the 50 people in the lobby of the Yellowstone County Courthouse expected the sale to be an instant replay of 2007, when the same lenders bought the hotel back to protect their loans during the first foreclosure sale.
Northern Hotel Holdings LLC, a retirement fund for a group of doctors and dentists in northwestern Montana, bankrolled two owners in a row who purchased the Northern but didn't make their mortgage payments.
Two years ago, the Montana investors foreclosed against South Dakota owners Robert and Susan Van Riper, then bought the hotel back at a sheriff's sale. In May 2007, they sold the hotel to San Francisco developer Hassan Kangarloo, who also failed to make payments.
But this sheriff's sale had a different ending.
When the foreclosure sale started at 10 a.m., Crowley attorney Bill Lamdin asked if there were any bids.
Chris Nelson offered $1.5 million.
The creditors' representative, Missoula accountant Dennis Minemyer, bid $2,475,089, which covered the original loan of $2 million, plus penalties and interest.
All eyes turned back to Chris Nelson.
"We'll beat his bid by $1," he said.
Mike Nelson has been managing Las Vegas hotels, including the 2,700-room Imperial Place. He will move his family back to Billings to manage the Northern.
Plans to turn the upper floors of the hotel at the corner of North Broadway and First Avenue North into condos are out, Mike Nelson said.
"It's a hotel, not a condo," he said. "We're shooting for an 18-month renovation. We might get portions of it open before that."
The brothers said they expect to spend another $10 million or more on the Northern's facelift. The hotel's furnishings were sold, and the building was locked up in September 2006.
Chris Nelson also owns other downtown Billings property, including the Montana National Bank and the former Hart-Albin buildings.
Losing the hotel for a dollar at the Yellowstone County Courthouse sale didn't bother the investors, according to Minemyer, their representative.
"My clients basically were ecstatic that the bid came in where it did. These people have the money to redevelop it," he said. "What a great day for the city of Billings."
Chris Nelson will offer wireless Internet connections to future guests because the hotel's low ceilings and brick walls make retrofitting for telecommunications cable prohibitively expensive.
And there's plenty of other things to spend money on.
The hotel's mechanical systems will mostly need replacing, all 160 rooms must be renovated, a restaurant will need to reopened, and a liquor license will have to be purchased for the bar.
"I have a vision for the hotel that the Northern is brought back to its rightful place in Billings," Mike Nelson said. "That means when people come into the lobby, there's a warm and inviting atmosphere where people can enjoy themselves."
When the hotel is running again, Mike Nelson said he will need 150 to 175 employees.
Lamdin called Kangarloo a "gentleman" for not declaring bankruptcy in order to try to hold on to the Northern, a move that would have dragged out the hotel's fate for another couple of years. He estimated that Kangarloo walked away from about $500,000 invested in the hotel.
Lamdin, who has 26 years of experience in conducting sheriff's sales, said most of them are snoozers.
"This time, there was a low bid of $1.5 million and the creditors bid for what they had in it," Lamdin said. "And then the Nelsons bested them by a buck. What drama."