Great American Resorts, Inc. changes name to Great American Hotels and Resorts, Inc.; records $460,000 capital gain on sale of Hilton Head units.
In 1995, the Company significantly changed its business plan for the purpose of dramatically increasing assets and achieving a positive cash flow by late 1996. The new business plan calls for the company to aggressively purchase hotels, sell subsidiaries generating losses and complete the renovation and development of its current properties.
On March 18, 1996 the Company closed in escrow the sale of 16 of its remaining 17 units on Hilton Head Island, S.C. Under the revised purchase agreement, the purchaser had placed an additional $100,000 into escrow and assumed all ongoing responsibilities for the expenses, management and maintenance of the units. Final closing took place on Thursday, April 11, 1996 at which time the purchaser paid another $124,000. Great American took back a second mortgage note of $207,500 secured by 13 of the properties payable and due in full on Friday, June 27, 1996. The 6 units previously sold by the Company were closed between Sept. 7, 1995 and Jan. 4, 1996. Great American estimates that it realized a profit of approximately $460,000 on the sale of all 22 units. The proceeds of the sale will be used to purchase and/or renovate hotel properties.
In March, 1996 Great American Hotels and Resorts, Inc. signed a contract to purchase a hotel in Biloxi, Miss., known as the Broadwater Inn for $5,500,000. The hotel is situated across the street from Biloxi's gulf coast beach and is centrally located to Biloxi's casinos. The hotel has 219 rooms and suites, conference rooms, restaurant and various other amenities for the use by guests and shareholders.
Net operating income for the Broadwater Inn was reported at $1,300,000 in 1995. The company is currently negotiating a first mortgage for the property of approximately $4,000,000. The other funding necessary for the completion of the purchase is already in place. If Great American is successful in obtaining a mortgage for the hotel, which cannot be assured, it hopes to close on the property by June, 1996. The month of June marks the beginning of the peak tourism season in Biloxi.
CONTACT: Great American Hotels and Resorts, Inc.
Teresa Bates, 770/476-3936