Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: FRIDAY, October 22, 1993                   TAG: 9310220377
SECTION: BUSINESS                    PAGE: A7   EDITION: METRO 
SOURCE: SANDRA BROWN KELLY STAFF WRITER
DATELINE:                                 LENGTH: Medium

KRISCH LOSES ITS LAST HOTEL

The publicly traded company said Thursday it has been forced to deed its 49 percent interest in the Sugar Bay Plantation Resort hotel in St. Thomas, U.S. Virgin Islands, to the lender that holds the property's mortgage.

"It was either that or foreclosure," said Ben M. Richardson, Krisch American senior vice president and general counsel for the company. Richardson said the company tried for months to find an investment partner.

The jobs of "several" salespeople based in Roanoke are jeopardized by the decision, but there's a chance the people might be retained by the property's new owner, Richardson said.

The hotel will be conveyed to LW-SP2, L.P., a Delaware limited partnership set up by Lehman Brothers, a New York investment broker controlling the investor group that holds the loan on Sugar Bay Plantation.

Richardson said the loss of the luxury resort hotel, which represents "six years of blood, sweat and tears," is more of a personal defeat than a financial one because the company had no equity in the property.

The 300-room hotel, valued at $52.5 million, was franchised as a Holiday Inn Crowne Plaza resort when it opened in September 1992, just before the island's prime season.

Richardson said the hotel did reasonably well, but suffered from competition and a depressed hotel market.

The decision to give up the resort effectively ends Krisch American, which is owned by holders of 5.9 million shares of stock.

In addition to Richardson and president Samuel Krisch, both of whom hold 6.52 percent of the stock, owners with more than 5 percent include Joel Kirsch, the company's chairman, with 10.3 percent; and the Trustees of Roanoke College, with 9.4 percent.

The company was formed in May 1986. In March 1992, after five years of losses, Krisch American and its privately owned, related companies avoided foreclosure by deeding 12 hotels to Westinghouse Credit Corp., which then held the hotels' mortgages.

Krisch Realty Associates still owns seven hotels and manages eight others through its Krisch Hotels company.

Krisch Realty's properties include the Sheraton Airport Inn in Roanoke and the Holiday Inn in Salem. The company's offices are behind Holiday Inn-Central on Franklin Road in Roanoke - but it does not own that motel.