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.
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