RT Lodge lease now part of bankruptcy proceedings

Jan. 15, 2021

A recent bankruptcy declaration by RTI Holdings, the parent company of Ruby Tuesday Restaurant Group, has made future operations at RT Lodge uncertain.

Leased from the College since 1997, RTI has operated the restaurant, hotel and special event site on seven acres in the College Woods. In that span of time, the company has renovated the 1930’s-era home formerly known as “Morningside;” constructed two large, complementary guest houses; and invested in extensive landscaping.

On Tuesday, Maryville College President Dr. Bryan F. Coker emailed a message to faculty and staff, explaining that the College was working with legal counsel locally and in the state of Delaware, where the bankruptcy was filed, to object to – and possibly contest – a forced lease reassignment to global investment bank and financial services company Goldman Sachs (which now holds most of RTI’s debts) and its subsidiary, Crescent Hotels and Resorts.

Below is, in its entirety, Dr. Coker’s communication to employees on the current situation.          

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Dear MC Colleagues:

I am writing to provide information on the future of the RT Lodge, located just south of campus in the College Woods. The RT Lodge is leased from the College by Ruby Tuesday (RTI), and if you follow local news, you are likely aware that RTI filed for Chapter 11 Bankruptcy on October 7, 2020. Within the large portfolio of RTI’s assets is the lease for RT Lodge.

The RT Lodge story dates to 1932, when Susan Wiley Walker relocated to Maryville to be near her sister, who was married to the MC Chaplain and resided at the “House in the Woods.” After seeing her sister’s home, Mrs. Walker sought the College’s permission to build her own residence in the MC Woods. The College agreed, provided that Ms. Walker would donate the home to the College upon her death. She built and named the 26-room house “Morningside,” and resided there until her death at the age of 98. Upon Ms. Walker’s passing, the house was indeed donated to the College, and for years served as the official residence of the College President. In later years, the property was leased and operated as a restaurant and special event destination named “Morningside Inn.”

In 1997, RTI entered into a long-term lease with the College for Morningside, developing it as a corporate retreat venue, restoring the grounds, and adding two buildings for guest accommodations. The property was renamed RT Lodge, and the lease agreement set forth that, if RTI ever sought to reassign the lease to another entity, the College must consent to such a reassignment and approve of any new leaseholder. That provision was put in place to ensure that the College maintained control of the partner who would steward Morningside.

In more recent years, RT Lodge has served as a popular lodging, dining, and wedding destination open to the public, all the while maintaining the local, small, and historic atmosphere which many have grown to appreciate. Undoubtedly, the College has benefitted from the exposure of the RT Lodge, as it has raised awareness of MC and our beautiful campus. Additionally, in 2018 we entered into an agreement, arranged by the College’s Strategic Planning Group, that set forth ways the College and RT Lodge intended to work together, such as collaborations for programming, research, internships, career exploration opportunities, and events.

In early 2020, the College entered into discussions with RTI about the RT Lodge lease being reassigned to Oliver Hospitality, based in Nashville. Oliver Hospitality’s portfolio includes The Oliver Hotel (Knoxville), the Fairlane Hotel (Nashville), and Hotel Clermont (Atlanta). Past President Tom Bogart, the Cabinet, and the Board of Directors Executive Committee approved the lease reassignment to Oliver Hospitality, and simultaneously granted an extension of the lease. 

The COVID-19 pandemic then struck, and consequently, the finalization of the lease reassignment to Oliver Hospitality was substantially delayed. Not long after I assumed office in July, the College was approached by Goldman Sachs, which holds much of the current debt for RTI, and Crescent Hotels and Resorts, a Goldman Sachs subsidiary. Goldman Sachs and Crescent expressed a strong interest in acquiring the RT Lodge lease and sought the College’s approval for this reassignment. After an evaluation of Crescent’s portfolio of properties, the College decided not to approve a reassignment to Crescent, and we expressed our strong desire for the planned acquisition by Oliver Hospitality to move forward and be finalized. We believed that Oliver Hospitality was in the best position to assume appropriate stewardship of RT Lodge, with respect for the small, local, and historic nature of the property.

The lease reassignment to Oliver Hospitality required the approval of RTI’s debtholder, Goldman Sachs, and ultimately, Goldman Sachs did not approve the reassignment. With the announcement of RTI’s bankruptcy, the question of RT Lodge’s future then entered the hands of the U.S. Bankruptcy Court for the District of Delaware, where the issue remains today, still unsettled.

There is the chance that the bankruptcy court could ultimately grant an RT Lodge lease reassignment without approval by the College, including a possible reassignment to Crescent Hotels and Resorts. Through our own attorneys as well as counsel in Delaware, we are strongly objecting to – and plan to contest – any forced lease reassignment. It is the College’s opinion that we should always have the right to choose the steward of RT Lodge, given the provisions of the lease, and that the Lodge is on our property and indelibly intertwined with our history. We are pursuing all avenues for maintaining this right, including an outright termination of the existing lease, if feasible. Our goal is for the lease to be reassigned to an entity that understands and will honor the small, local, and historic nature of the property, is committed to responsible stewardship of the property, and to being a true partner with the College.

Oliver Hospitality remains interested in – and ready to acquire – the RT Lodge lease, should the bankruptcy court consent. In recent weeks, the College has been approached by another local entity interested in the lease, and we believe this group would also be a good partner and steward of the property. Thus, we are hopeful that one of these entities of which we approve is ultimately successful in acquiring the lease.

It is extremely important to note that the RT Lodge and Restaurant currently remain open, fully operational, and functioning wonderfully – I encourage you to continue to visit them, just like always. The outstanding crew there, led by Gary Doyle, remains in place as well.

We will work to keep the MC community updated on any significant developments in this regard, as we endeavor to remain responsible stewards of the Morningside property, Ms. Walker’s legacy, and the College Woods.

Sincerely,

Bryan F. Coker, Ph.D.
President

Maryville College is a nationally-ranked institution of higher learning and one of America’s oldest colleges. For more than 200 years we’ve educated students to be giving citizens and gifted leaders, to study everything, so that they are prepared for anything — to address any problem, engage with any audience and launch successful careers right away. Located in Maryville, Tennessee, between the Great Smoky Mountains National Park and the city of Knoxville, Maryville College offers nearly 1,200  students from around the world both the beauty of a rural setting and the advantages of an urban center, as well as more than 60 majors, seven pre-professional programs and career preparation from their first day on campus to their last. Today, our 10,000 alumni are living life strong of mind and brave of heart and are prepared, in the words of our Presbyterian founder, to “do good on the largest possible scale.”