Portofino Hotel remains closed

Published 8:48 pm Saturday, July 16, 2016

A trio of lawsuits — two in Mississippi and one in Texas — forced Vicksburg Hotel LLC, owner of the Portofino Hotel on Mulberry Street, to halt plans for the building and its adjacent property, the attorney for owner Greg Stewart and the company said.

Portofino closed its doors July 21, 2015, and has not reopened.

At the time, the closing affected 33 events planned for the Vicksburg Convention Center, forcing convention center officials to work with event planners to book new hotels for the participants.

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When he announced the hotel’s closure, Stewart said he expected it to be closed for about seven months while renovations and repairs were performed on the building.

“We’re making improvements,” he said then. “We’re redoing the outside and painting the building. We’re having to demolish everything that’s adjacent to the floodwall, and when we’re done with that, we’re going to rebuild the restaurant while we’re waiting for the plans for the casino.”

Stewart added a land-based casino and possibly a waterpark were planned for the property.

About a year later, no work has been done on the property, the hotel remains locked, and the closing still affects the convention center.

“We are missing it very much so,” said Annette Kirklin, convention center executive director. “We had a proposal that we really thought we would get for a very large convention, and a number one reason we did not get it is because we do not have a hotel within walking distance of the convention center. They went to Natchez, and it was a 700-person convention.”

The lack of activity at the hotel has caused speculation among residents about the property’s future, including the possibility it is up for sale.

“The property is not currently up for sale,” said Gulfport attorney Bill Little, who represents Stewart and Vicksburg Hotels LLC.

“There has been litigation concerning the validity of the transfer of title to the hotel to the owner, Vicksburg Hotel LLC, and has stymied development of the property, which is where the restaurants used to be,” he said. “And without that adjacent facility, the hotel was just not profitable, and that’s the reason why the decision was made to close the hotel.

“When the litigation gets resolved there should be further activity at that time,” he said, but would not speculate when the legal issues would be cleared.

The suit challenging Vicksburg Hotel’s title on the property was filed August 2014 in Dallas County Circuit Court by a company called B.O.S. Consulting LLC.

It was dismissed Tuesday with prejudice, according to court records, meaning BOSC cannot re-file the suit. The reason for the dismissal was not given in the records.

According to the suit, BOSC signed a contract in February 2012 with the hotel’s previous owners, M Street Investments and Great Southern Investments, for consulting work for $150,000 a month and to eventually handle management and operations of the hotel and casino for a fee of $150,000 a month or 3 percent of the gross gaming revenue and 10 percent of the net revenue of the hotel and casino, whichever was greater.

The suit sought $1 million in damages from M Street and Great Southern.

At the time of the suit, Great Southern was serving as the overseer for what was then the Grand Station Hotel and Casino owned by Delta Investments LLC. It and M Street acquired the property later, after Delta Investments declared bankruptcy under Title 11 of the federal bankruptcy laws.

According to the lawsuit, Vicksburg Hotel bought the building in July 2013, acquiring it “for no cash and assumption of the debt on the hotel on or about July 15 (2013).” BOSC claimed the deal was an attempt by Great Southern and M Street “to hinder, delay of defraud creditors,” and asked the court to declared the title transfer void, or no good.

Vicksburg Hotel in September 2015 filed suit in Warren County Chancery Court against BOSC, M Street and Great Southern in connection with the Dallas suit. The suit sought to have a court-ordered control over the hotel property filed by BOSC, and the title challenge removed.

It also charged Great Southern and M Street, which according to the suit, owns all Great Southern stock, with breach of contract for not revealing the relationship with BOSC to Vicksburg Hotels. The suit seeks unspecified damages. A hearing was delayed pending the results of the BOSC suit in Dallas.

On May 6, Portofino LLC, a company interested in buying the hotel that bears its name, sued Vicksburg Hotel for  the $500,000 it claims it is due because the company decided not to buy the building.

According to the suit in Warren County Circuit Court, the money was “earnest money” paid to Vicksburg Hotel in September 2014. Under a clause in a purchase agreement, Portofino had a 60-day “due diligence period” to examine the building and decide if company officials wanted to close the sale. The due diligence period was extended in October 2015, when Portofino and Vicksburg Hotel signed a sales contract.

When Portofino decided to back out of the deal, Vicksburg Hotel, according to the suit, did not refund the money. The matter has not been resolved.

“It has hurt us,” Kirklin said of Portofino. “We don’t hear it as much as I thought we would because we have a motor coach (purchased by the city) that does assist (getting people from hotels to events).

“We have great hotel properties here in Vicksburg, wonderful hotel properties, but that is the number one thing planners look for. They look for the convenience factor. We have witnessed a bite. We got bitten because of that. We don’t like being defeated. Whether it’s that property or another property, we need a hotel that is within walking distance from the building.”

“When the hotel was full, we would go and hand out menus and stuff like that,” said Laura Belden, manager of KJ’s River Town Grille. “People liked that they could walk back and forth to a hotel.

“People always ask me where is a place to stay downtown that’s nice and safe, and we don’t have that anymore. There isn’t really anywhere down here that we can recommend.”

Harrah’s Casino operated at the site of the Portofino from 1993 until 2003, when it sold its Vicksburg property to Columbia Sussex.

The names on the casino and hotel changed to Horizon until the fall 2010, when Tropicana Entertainment, which was part of Columbia Sussex and operated Horizon, went bankrupt and closed the casino.

In 2011, the venue reopened as Grand Station, but closed in March 2012 amid bankruptcy.

From 1993 until the Grand Station bankruptcy, the casino was located on a barge built to look like a riverboat that was moored in the Yazoo Diversion Canal next to the hotel and surrounded by a cofferdam.

The former casino vessel was auctioned for scrap metal in April 2013. hauled away.


About John Surratt

John Surratt is a graduate of Louisiana State University with a degree in general studies. He has worked as an editor, reporter and photographer for newspapers in Louisiana, Mississippi and Alabama. He has been a member of The Vicksburg Post staff since 2011 and covers city government. He and his wife attend St. Paul Catholic Church and he is a member of the Port City Kiwanis Club.

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