Capitol Hotel Group Pursues Expansion Drive East Of Rockies, In Carolinas Following Completion Of Internal Restructuring

ROCKVILLE, MD? Capitol Hotel Group recently restructured its organization to pursue a more aggressive acquisitions strategy and to better manage the 10 properties in its portfolio. CHG, a subsidiary of CRI, an international real estate investment firm, currently owns and manages 10 hotels in Arizona, Florida, Illinois, Minnesota and Tennessee. Three of the properties CHG directly manages include the Holiday Inn Metrodome in Minneapolis; the Holiday Inn Burnsville near Minneapolis; and a Holiday Inn Express in Nashville. The seven other properties are asset managed. Brands include Hyatt, Days Inn and Hampton Inn. In addition to these properties, CHG expects to soon pick up a third-party management contract for a Radisson hotel in Stillwater, near the Minnesota/Wisconsin border, according to W. Douglas Smolinski, executive vp. Playing On Strengths ?It makes perfect sense because of the economies of scale with our other properties in Minnesota,? Smolinski said. The Stillwater project involves the conversion of a 100-year-old prison into a 190-room hotel. Opening is slated for next summer. Smolinski, a 25-year veteran of the hotel industry, will be leading the expansion program for CHG. Working with him will be Philip Capizzi, newly named director of asset management/acquisitions. Capizzi has been with CHG since 1988 and has been involved in most aspects of the company?s operations. ?The plan is to acquire two full-service properties a year. We?re looking at properties east of the Rockies, primarily second tier cities,? Smolinski said. He noted that CHG also has strong interest in acquiring properties in the Carolinas. ?The emphasis now is on growth. We?re being aggressive and going out and looking at properties,? Smolinski said. While much of the focus will be on buying and managing existing properties, CHG is now having HVS International do a feasibility study for the development of a Hilton Garden Inn on 125 acres CHG owns in Lakeville, MN, according to Smolinski. ?This area is a hotbed of development,? he said. Financing for the expansion projects ?will be through normal methods,? Smolinski said. ?Conduit financing has generally been the direction in the past.? Smolinski said that the recent restructuring of the organization was designed not only to facilitate growth, but to be more responsive to the needs of the properties in the company?s portfolio. When CRI formed CHG in 1986, ?it was a very active time in the hotel business,? Smolinski said. ?They took on a decent number of properties (a total of 27), and the focus was on operating what they had.? Much of the efforts of CHG management at that time were devoted to the larger properties in the portfolio. In subsequent years, the portfolio was trimmed down and the large properties disposed of, so now more attention can be given to the other hotels. ?One of the objectives of the restructuring is to focus on each individual property. We will be visiting them each month and will be intensely involved on a daily basis,? Smolinski said. To create ?more responsive leadership? to assist general managers at CHG?s properties, a number of directors were appointed during the restructuring in addition to Capizzi. They include: ? Jack Stere, director of hotel operations. He has 15 years of operations and finance experience with Doubletree Hotels, Hilton and Hershey Entertainment and Resort Co. ? Gail Tristano, director of human resources and risk management. She has been with CHG for six years. ? Howard Henry, director/audit and financial controls. He has been with CHG since 1997 and served as controller of the Holiday Inn Express in Nashville. Also named to a new position was Kim Deffinbaugh, who has been with CHG for 11 years and will serve as coordinator for the day-to-day operations of the company?s office in Rockville, MD and will provide assistance for the acquisitions effort and management of hotel operations. Smolinski took up his position as executive vp of CHG last yea