When the deal to acquire and renovate Medford's Red Lion Hotel was announced, critics lost no time bashing the City Council and the Lithia Motors executives who put it together. The deal was bound to turn a tidy profit for DHD, the partnership Sid and Mark DeBoer formed to buy the hotel, the critics said, and the city paid too much for a portion of the property to be converted to parking.
As it turns out, there is likely to be little profit in the arrangement for the DeBoers, and a sizable amount of risk. They should be congratulated for continuing to demonstrate their commitment to downtown Medford, not attacked.
That won't silence the critics, of course. Bashing Medford's downtown revitalization efforts is a popular pastime for some city residents, and Lithia is a favorite target as well.
It's also true that the DeBoers helped fuel the backlash by keeping much of the deal under wraps until it was complete. Some of the secrecy was imposed by Red Lion Hotels Corp., which was marketing other properties as well and didn't want to tip its hand to other prospective buyers. But a little more transparency about DHD's motivation and goals would have gone a long way toward reassuring the public that the transaction was in their best interest.
The details that have emerged reveal a venture designed to rescue the Red Lion and return it to its former status as a convention hotel in the heart of downtown with fine dining and upscale rooms. To accomplish this, DHD has enlisted Doug and Becky Neuman, who have a track record of successful hotel renovations, to take charge of the Red Lion project.
The Neumans are in the midst of renovating the former Windmill Inn in Ashland, and were initially reluctant to take on another major project. To convince them, DHD offered to lend them the purchase price plus enough money to begin overhauling the property.
If all goes as planned, the Neumans will obtain a commercial loan in three years, pay off DHD, and end up with an attractive destination hotel across from The Commons in downtown Medford. If not, DHD could end up owning the hotel after all — not what the DeBoers intend.
As Sid DeBoer explained in a Mail Tribune story last week, Lithia Motors was not interested in loaning money on the hotel, so "I had to personally take that on."
DeBoer says the hotel project is part of his desire to use his wealth to benefit the community.
That's worth celebrating, not criticizing.