Milwaukee hotel could be up for auction in the fall following bankruptcy

Iron Horse Hotel owner Tim Dixon is looking to sell the property by mid-October to resolve an ongoing bankruptcy, a court filing showed.

In 2022, Dixon declared Chapter 11 bankruptcy in a Delaware court and said the COVID-19 pandemic had impacted his business at 500 W. Florida St. in Milwaukee. The hotel first opened in 2008.

According to a recent filing, the owner hopes to have an auction start Sept. 19 and have a sale closed Oct. 16 to settle its claim with Miami-based lender Rialto Capital.

The owner sought the court’s approval to hire JLL as a real estate broker, the filing said. JLL developed “a list of approximately 2,400 investors,” who may be interested in the property. JLL had executed confidentiality agreements with over 50 contact parties as potential bidders, the filing added.

The marketing and bidding procedure in the filing’s proposal give enough time to execute a “stalking horse” agreement and possibly hold an auction to find the highest or otherwise best bid for assets, the owner’s attorneys wrote.

Dixon has also worked to find investment partners for potential financing alternatives, his attorneys wrote in the filing.

In 2015, a Delaware limited liability company called Starwood Capital loaned Rider Hotel LLC, Dixon’s company, a loan of $19.5 million. The loan was later assigned to a new company and Rialto was the newly designated loan servicer, according to the 2022 bankruptcy filing.

City records showed the hotel property is valued at around $21 million.