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

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

With the original Jan. 11 auction postponed at the last minute for undisclosed reasons, a new date was mandated. It's set for 2 p.m., Feb. 18 in Erie County Hall.

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

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

The hotel was acquired by American Hospitality Group LLC in September 2004. It paid $3.55 million for the property, but a series of gap financing packages that covered renovations increased the mortgage to $6.25 million, according to court documents. The $7.937 million figure includes the mortgage, interest, legal costs and other associated fees.

Like most of the area's hotels, the Grand Island Holiday Inn has suffered because of a regional drop in tourism that began more than a year ago. However, hotel occupancy in the region is slowly moving upward.

The hotel has remained open since it was placed in the hands of a court-appointed receiver in April. It likely will remain open throughout the sale and beyond.