By JAMES FINK
jfink@bizjournals.com | 716-541-1611

A Jan. 11 foreclosure sale has been set for the Holiday Inn Resort & Conference Center on Grand Island.

The sale date is the latest in an ongoing legal battle between Royal Bank of Canada and American Hospitality Groups LLC, owner of the 263-room hotel on Whitehaven Road. In papers filed in New York State Supreme Court, Royal Bank of Canada says it is owed $7,937,745 by American Hospitality Group.

The sale is set for 2 p.m., Jan. 11 in the foreclosure alcove of Erie County Hall.

Legal action against American Hospitality Group was initiated earlier this year by Royal Bank of Canada, which assumed the hotel's mortgage in September 2007.

The hotel was acquired in September 2004 by American Hospitality Group, which paid $3.55 million for the property. A series of gap financing packages that covered renovations increased the mortgage to $6.25 million, according to court documents. The $7.9 million includes the mortgage, interest, legal costs and other fees.

Like other hotels, the Grand Island Holiday Inn has suffered because of a regional decrease in tourism that started in 2009. Hotel occupancy has been on the rise since spring, however.

The hotel has been open since it was placed in the hands of a court-appointed receiver in April and most likely will remain open during the sale.