Time has finally run out on Kronos.

Thursday, lenders foreclosed on 16 facilities owned by the beleaguered, Atlanta-based firm of Kronos Hotels and Resorts.

One of those hotels is the former Holiday Inn at 521 Greenfield Road. It is the facility which, in the past month, has had its Holiday Inn franchise revoked, its restaurant closed by state health inspectors and was searched by state Liquor Control Enforcement officers.

It is also being sued by the county for nonpayment of taxes, and employees have complained that their paychecks have routinely bounced.

The banks behind the foreclosure have turned over management responsibilities to the Dallas-based Prism Hotels and Resorts.

The turnover was immediate. An e-mail sent from Kronos corporate offices Thursday morning instructed employees to "Please move forward with the transition to Prism."

According to employees at the Greenfield Road and other facilities, when the takeover happened, Kronos staff members left and were replaced by Prism employees.

While Prism is managing this and other hotels, a new twist occurred Friday when another entity, Hyperion Hotel Investments, of Atlanta, suddenly emerged.

Initial contacts with Prism's main office Thursday were referred to the company's Atlanta-based public relations firm, Hope-Beckham Inc. A spokesman there said the firm was working with Prism officials to develop a statement.

Getting back on track
Released Friday, the statement reads, in part, "Hyperion Hotel Investments LLC has replaced the hotel's former management company, Kronos Hotels LLC. The hotel, its employees and the community will benefit with Hyperion's new management in place, and the company plans to infuse new capital and upgrades into the hotel. Hyperion is currently reassessing business operations and implementing corrections for this property, as well as properties in other markets that were being managed by Kronos.

"Hyperion's goal is to get the hotel back on track and fully operational so it is an asset to the community, and we would like to assure the residents of Lancaster that Hyperion is working tirelessly to make sure this happens."

When asked to explain the relationship between Hyperion and Prism, the spokesman said, "Hyperion is the owner's representative, Prism is the hotel manager."

The spokesman could not clarify if the term "owner" referred to Kronos Hotels.

However, the spokesman did say Hyperion will work with Prism in properties "where Hyperion and Kronos had a relationship."

Contacted Thursday, Kronos spokesman Peter Mathon said he would soon be issuing a statement from the company.

However, when contacted Saturday, Mathon said no statement would be issued.

Hyperion is also involved in managing a Crowne Plaza in Cedar Rapids, Iowa, where the initial foreclosure lawsuit alleged Kronos went into default on a $48.5 million loan.

That amount was secured by mortgages on the Cedar Rapids Crowne Plaza and 10 other hotels.

The lead attorney in the foreclosure, Joe H. Harris, told the Cedar Rapids Gazette that a formal hearing on the foreclosure is expected next month.

Harris did not return phone calls to his office last week.

The foreclosure stems from a loan made to Portfolio Cedar Rapids, a corporate entity controlled by Kronos, in June 2007 when Kronos purchased 16 properties across the country. Kronos set up similar companies (Portfolio Lancaster is the operating entity of the Greenfield Road hotel) to oversee operations in each of the 16 locations.

The lead plaintiff in the foreclosure lawsuit, Harris told the newspaper, is CW Capital Asset Management, a loan servicer for Wells Fargo Bank. Wells Fargo is the trustee for the registered holders of mortgage financing certificates.

In Cedar Rapids, officials said the Prism management team would be in place until next month's hearing on the foreclosure.

However, the Hope-Beckham spokeswoman said Prism's involvement at the Greenfield Road hotel "should be a long-term relationship."

Further, she added, "We expect that the foreclosure action will be withdrawn shortly."

The spokeswoman also said Hyperion and Prism would work with InterContinental Hotels Group to have the Holiday Inn franchise reinstated at the facility. IHG, which owns the Holiday Inn brand, revoked that franchise on Oct. 1.

That is not the only work facing Prism and Hyperion.

There are the issues of resolving the county's lawsuit, as well as state liens placed against the property for nonpayment of Pennsylvania sales taxes.

Further, East Lampeter zoning officer and building code official Lee Young said, "It does not make any difference [who is managing the property.] We're going to let these folks know they have issues to deal with."

He noted that Kronos had already removed trash from the property. However, he said, problems still exist with the hotel's fire alarm panel.

"We need to be assured it is functioning and functioning properly," he said.

He expressed hope the new management team would communicate with local and state municipalities.

"They're going to have to do a lot of dialoguing" to re-establish credibility, he said.

Similarly, Liquor Control Enforcement District Commander Sgt. Troy Lokhaiser said his office is completing its investigation into illegal liquor sales at the hotel.

Employees remaining at the hotel through the Kronons-to-Prism transition were reluctant to comment on the situation.

However, Tom Showalter, who was an assistant general manager at the facility for a year and a half and was the acting general manager from July through December 2007, has been in daily contact with the employees since his departure.

"People have a bright outlook now," he said. "They're a little apprehensive because they had the same [positive] feelings when Kronos came."

Showalter, who has been running an online campaign against Kronos through his Web site, www.kronoshotelsllc.com, said he is optimistic.

"You don't know how good I feel right now that Kronos is on the defensive," he said.

Chris Barrett, president of the Pennsylvania Dutch Convention and Visitors Bureau, is also pleased.

Barrett earlier said the tourist center, which sits next to the hotel property, had stopped recommending visitors to the facility, which was no longer a member of the bureau.

Prism, said Barrett, "is a growing company and we are thrilled Prism has decided to take over the property.

"I'm very optimistic," he continued. "We want them to be a thriving part of our community."

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Chip Smedley is a staff writer for the Sunday News. E-mail him at csmedley@lnpnews.com.