HOOD RIVER, ORE. -- The historic Columbia Gorge Hotel in Hood River, Ore., is being bought by Tri-Cities and Eastern Oregon hotel owner Vijay Patel of Kennewick.

Patel said Friday he expects the deal to close Oct. 30.

He said the family-owned operation is excited to buy the regional landmark. "That hotel has a lot of history, and we will make it better."

Patel said he was looking into building a hotel in The Dalles earlier this year when he learned about the Columbia Gorge Hotel being for sale and began pursuing a deal. "We wanted to add a boutique-style hotel to our holdings," he explained.

"There were quite a few other companies interested in buying it, but the bank did its due diligence and picked us," Patel added.

Immediate plans are to improve the guest rooms, Patel said, estimating that work will be done by the end of March.

Patel and Rakesh Malhan of Richland formed A-1 Hospitality Hood River to buy the 42-room hotel from ShoreBank Pacific. The bank took over the property from its former owners in January in a foreclosure sale for $4 million.

Patel said he actually had been negotiating with the former owners before they lost it to the foreclosure. He noted the deal worked out better for his company, as it had offered the former owners $5.9 million, which they rejected.

Though he declined to reveal the exact purchase price, Patel said it was "a little higher than $4 million and under $5 million."

After ShoreBank Pacific bought the hotel, it hired North Pacific Management of Portland to operate the business. The hotel was reopened in September for Labor Day weekend.

The new owner is a subsidiary of Patel's A-1 Hospitality, which owns five hotels, including the Holiday Inn Express in Pasco and the Fairfield Inn by Marriott in Kennewick and three hotels in Pendleton.

Patel, 53, said his company plans to re-establish the Columbia Gorge Hotel as the "premier boutique destination hotel" in the region.

He said he will be keeping the current staff, including General Manager John Taffin, who he said ShoreBank hired from Timberline Lodge on Mount Hood. The staff will total about 68, Patel said, with about 38 of those working full time and the others part time.

Though he wants to improve the guest rooms, Patel said the restaurant is already high quality and should remain mostly unchanged.

In Pendleton, Patel's company owns the Travelodge, the Holiday Inn Express and America's Best Value Inn. Patel said the company also is planning hotels in Hermiston, Boardman, The Dalles, Lebanon and Pasco, but financing for new construction is difficult to get in the current economic climate.

The Columbia Gorge Hotel has drawn visitors to Hood River since it was opened in 1921 by timber tycoon Simon Benson as a high-end luxury hotel and restaurant.

It has been listed on the National Registry of Historic Places since 1979, according to the National Park Service.

Previous owners Boyd and Halla Graves reportedly closed the business last winter because of health problems and loss of business caused by the recession.

Patel said room rates will run from $99 per night to $250 a night, depending on dates of stay and other events.

A native of Uganda, Patel was educated in India and got his start in hotels in 1994 when he and his family moved from England to manage a hotel in Klamath Falls, Ore., that was owned by a family member.

He bought the Travel Lodge in Pendleton in 1997, and in 2004 he built the AmeriSuites Inn, now Holiday Inn Express, near TRAC in Pasco.

Patel and his family, which includes wife Mita, daughter Preena, 23, and 17-year-old son Taran, live in Kennewick and he said he has no plans to leave the Tri-Cities even as his company's holdings extend elsewhere. "I'm proud to be a Tri-Citian, and I think Tri-Citians will be proud to know about the Columbia Gorge Hotel being owned by one of us," he said.

-- Rick Larson: 509-582-1522; rlarson@tricityherald.com