Fort Scott Inn to close

Friday, March 18, 2011
The Fort Scott Inn, now in foreclosure, will likely be sold at auction in mid-April. (Jason E. Silvers/Tribune)

Succumbing to the effects of a slow economy, the owner of the Fort Scott Inn anticipates closing the establishment in mid-April.

Now in foreclosure, the 78-room hotel, 101 State St., will be put up for auction next month. Owner Bhupinder Singh "Bob" Dhillon has two other hotels in Ottawa, Kan., and Iowa.

The Ottawa property was foreclosed on and sold at auction in December for $600,000. Dhillon said he paid $1.6 million for that hotel.

Dhillon, who purchased the Fort Scott Inn in 2007, said business has been down the last few years, and now due to the foreclosure, he said he has "no choice" but to close.

"When business drops, it's hard," he said.

Dhillon said the Fort Scott Inn was appraised at $2.6 million when he bought it in 2007, but he thinks it would only be worth about $700,000 at auction "with the current economy."

He made a 35 percent down payment on the hotel in 2007. The amount of the loan was about $1.2 million, he said.

The loan on the Ottawa property went into default last September and when the bank foreclosed, he turned in the keys, but it remained open another few months, Dhillon said.

Dhillon said the restaurant and bar inside the Fort Scott Inn have been closed for about a year due to a decline in business the last two years. Business at the hotel has also been slow in recent years, forcing him to cut the 25 full-time and part-time employees he started with in 2007 to just two housekeepers currently.

He has done some remodeling in the hotel since 2007. The roof needs several thousand dollars worth of repairs, Dhillon said.

Dhillon said when he first bought the hotel, he did not "anticipate such a bad economy" in the coming years.

"In today's market, it's hard to run the place," he said.

Dhillon said he has tried to help in the community by accommodating different local groups and organizations when needed.