UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event Reported): February 26, 2021 (
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| Item 8.01 | Other Events. |
On February 24, 2021, RL Olympia LLC completed the sale of the Hotel RL Olympia (the “Hotel”) to California Investment LLC, a Washington limited liability company (the “Purchaser”). The purchase price for the Hotel was $8.0 million, which was paid in cash at closing.
RL Olympia LLC is a wholly owned subsidiary of RL Venture, LLC (the “Joint Venture”). RL Venture, LLC is a variable interest entity in which Red Lion Hotels Corporation (the “Company”) holds a 55% interest, and therefore consolidates all of the assets, liabilities, and results of operations of this entity.
Net proceeds from the sale of the Hotel, after payment of closing costs and the repayment of a $5.6 million property level mortgage, were $2.0 million. The Company expects to receive a cash distribution from the Joint Venture of $1.1 million, representing its 55% member interest. This cash will be available for general corporate purposes.
At closing, the Purchaser entered into a franchise agreement with Red Lion Hotels Franchising, Inc., a wholly owned subsidiary of the Company, to continue to operate the hotel under the Hotel RL® brand. The franchise agreement provides for a 20-year term, and requires the payment of monthly royalty and program fees based upon the Hotel’s gross room revenue. The Purchaser may cancel the franchise agreement on the 5th, 10th, or 15th anniversary of the Agreement by providing proper notice.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| RED LION HOTELS CORPORATION | ||||||
| Date: February 26, 2021 | By: | /s/ Gary A. Kohn | ||||
| Gary A. Kohn | ||||||
| Executive Vice President | ||||||
| Chief Financial Officer, Secretary, and Treasurer | ||||||