Just Sold: Iron Range hotel sale may spark development.

Byline: Anne Bretts

Editor's note: "Just Sold" is a Finance & Commerce feature based on certificates of real estate value recently filed for commercial transactions and significant residential transactions in Twin Cities counties. Additional details in the transactions come from Plat Research, the Minnesota Secretary of State's Office, company documents, online real estate listings, F&C archives, CoStar and other research. Some purchase prices and per-unit calculations have been rounded.

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A 79-room Holiday Inn Express & Suites that opened in 2009 in Mountain Iron has sold for $9 million to a St. Cloud buyer planning renovations and rebranding this fall and winter and a possible second hotel in the future.

It's a move the hotel's developer says will give him time to focus on the completion of the final pieces of Rock Ridge, a 40-acre mix of hotels, retail, restaurants and apartments.

Mountain Iron Hospitality Exchange LLC, an entity of Brutger Equities Inc., closed Sept. 30 on the $9.05 million acquisition of the hotel at 8570 Rock Ridge Drive. The seller was Home on the Range LLC, an entity of Island Investment, Inc., a hospitality company based in Duluth. The sale included a $1.17 million down payment and new financing. It also included $500,000 in furniture, fixtures and equipment.

The price works out to $114,557 per room.

"The renovation will consist of a new exterior scheme, a new lobby design, a new guest room dcor, fitness center, etc.," said George Hovland, vice president of hospitality for Brutger. "We will be reflagging to a Comfort Inn & Suites by Choice Hotels on January 20, 2020."

The sale also included an additional 2.17 acres for a future hotel development, he said.

Brutger operates a dozen hotels in four states, including a new Fairfield Inn & Suites under construction in Duluth, scheduled to open in summer 2020. It owns and manages 20 multi-unit residential properties throughout the Midwest and two restaurants in North Dakota.

The development lies on along U.S. 53, the main north-south highway from Duluth to International Falls. Mountain. Iron is on the edge of Virginia, a regional hub on the Iron Range.

"Our intentions always have been to complete the 40-acre Mountain Iron development as promised, and by selling the Holiday Inn Express hotel to Larry Brutger of St. Cloud, we feel that will help further that effort," said Rockie Kavajecz, president of Island Investment, in an email interview.

Kavajecz, who spent...