A group of doctors who formed a small investment club 20 years ago has sold the Holiday Inn in Northeast Washington, one of the few major hotels owned by blacks in the U.S. to Catholic University for $4.1 million
The group, called the Standard Investment Co. Inc., whose 15 members include some of Washington's best-known physicians, bought the hotel eight years ago "with no government money, just a group of guys getting together and doing something without fanfare," said attorney James W. Cobb, the club's president and lone nonphysician.
The sale of the 146-unit hotel to the nearby university for use as a dormitory will leave Washington, a city that is 70 percent black but known for its lack of large black businesses, with only one large black-owned hotel, the Howard Inn, formerly Harambee House, at 2225 Georgia Ave. NW.
At a time when blacks are clamoring to prevent the dismantling of special government assistance programs for minority businesses and the city government has insisted that blacks be involved in development projects on city-owned land, Cobb and his group say they are proud that they gained their success the old-fashioned way -- without government assistance.
The group's ownership of the hotel was little known, even in the city's black business community.
"We made no effort to hide it," said Cobb, adding that the group also did not seek publicity about its purchase. "Who owns it [the hotel] is not important."
The group "has an awful lot of pride" as blacks who were able to buy a Holiday Inn franchise and operate successfully, Cobb said. Holiday Inn franchise are among the hardest to obtain because of the quality control standards set by the company, the world's largest hotel chain.
Standard Investment was formed in 1961 when Dr. Raymond L. Standard, the city's former health director, invited other doctors he had known from the Howard University Medical School and Freedman's Hospital [now called Howard University Hospital] to form an investment club.
They were all in their late 20s and early 30s and just beginning their medical practices, Cobb said. About 21 joined, named the group for Standard, and began contributing $25 a month, Cobb said.
At first, the group bought a few houses and made small loans, some to club members. A few dropped out, and in 1973 when they were offered the Holiday Inn franchise, 16 remained.
The group had no experience running a hotel, "but it was a Holiday Inn and our egos wanted to know if we could do it," Cobb said.
They traveled to Holiday Inn headquarters in Memphis, gained approval from the hotel chain's officers, paid an undisclosed price for the hotel, hired a 25-member staff and started running it.
The group sold the hotel to the university because it made an attractive offer and because the investment firm feared that with the construction of the city's new convention center more poeple might be inclined to stay downtown rather than at the hotel, located at 730 Monroe St. NE, Cobb said.
University treasurer Richard yapplegate said the motel was needed for a dormitory because the 1970s trend of students to live off campus has been reversed in the face of the rising housing costs and now there is a growing demand for on-campus housing. The hotel, which will house 250 students, was purchased with a 3 percent loan from the U.S. Department of Education, Applegate said.
Cobb said his one disappointment is that Standard Investment has failed to get other black professionals to follow its example of starting an investment club. "Very few people are willing to make that commitment to put up money on a long-term basis," he said.
In addition to Cobb and Standard, the club's members include doctors Henry D. Bell; Francis Blackwell; William R. Claytor; Cyril Crocker; Cleveland E. Smith, chief of gynecological serives at Columbia Hospital for Women; Francis L. Smith; Warren J. Strudwick; William J. Washington, a former high-ranking city health official; Richard A. Wilson; Talmadge G. Wilson; Jesse B. Barber, chief of neurosurgery at Howard University Medical School, and Lawrence B. Dunmore. The late Erman W. Edgecombe, former president of the Washington Urban League, was also a member.