The Iron Horse Hotel in Milwaukee’s Walker’s Point neighborhood has reached a deal with its lender to resolve its Chapter 11 bankruptcy and foreclosure, according to recently-filed court records.
The 102-room boutique hotel, located at 500 W. Florida St., opened in 2008 after its owner Tim Dixon redeveloped a six-story, nearly 96,000-square-foot former warehouse building into the motorcycle-themed hotel.
In 2022, Dixon filed for bankruptcy due to longstanding financial troubles and the COVID-19 pandemic’s impact on the hotel industry. In September, the hotel was sent to auction to pay off Dixon’s Rider Hotel LLC ownership company’s mortgage, but no bids were worth more than the $24 million that it owes.
Now, court filings dated Nov. 22 show that Rider Hotel and its lender, a firm that has been referred to as “RSS” is court proceedings, have reached an agreement for Rider Hotel to keep ownership of the hotel and end the foreclosure.
Rider Hotel would pay millions of dollars toward the loan from RSS and the loan would be made current by the end of this year, court records say.
This summer, Dixon and RSS had agreed to sell the hotel to pay off the debt. That attempt “generated robust interest” but did not result in any bids that were worth more than the $24 million Rider Hotel owes to RSS, according to filings with the court.
“While the sale process was underway, I continued to discuss with RSS the possibility of bringing the loan current and reinstating the loan in good standing by the end of 2023 as an alternative to selling the hotel,” Dixon wrote in a statement to the court.
Dixon’s statement went on to say that the ongoing litigation affects morale of employees at Iron Horse when “margins are thin and attention is needed to drive business to the hotel.”
Rider Hotel LLC paid $100,000 toward the operations of the Iron Horse in November to help its operations cash-flow. The most recent court filings indicated that it was difficult to pay for the costs of the bankruptcy case when “cash flow is tight” at the hotel, generating another argument for the agreement to end the case.
After that, lender RSS and Dixon reached agreement in late October to bring the loan back into good standing and end the bankruptcy and foreclosure lawsuits, according to court records.
A motion to dismiss the case has been filed, but is awaiting court approval.
