July 20, 2005

New Owner Hospitality Associates of Tannersville, L.P. To Undertake a $3.1 Million Renovation

Boca Raton, Florida based Milestone Capital Corporation, owner of fifteen hotel properties in six states, announced this morning their acquisition of the Chateau Resort and Conference Center (300 Camelback Road, Tannersville, PA 18372), and unveiled plans for a $3.1 million renovation effort which is set to begin immediately. The announcement was made at Milestone's corporate headquarters located in Boca Raton, Florida. The property will be managed by Milestone's operating affiliate, Milestone Hospitality International.

Strategically located at the foot of Camelback Mountain in the Pocono Mountains region of northeastern Pennsylvania, the Chateau Resort and Conference Center is the closest hotel property, full-service or otherwise, to the market's premier tourism demand generators, Camelback Ski Resort and Camelbeach Water Park, a winter ski and summer swim sports venue that collectively attract more than 700,000 visitors to Monroe County on an annual basis. Camelback Ski Resort is a nationally recognized winter sports venue featuring 33 ski slopes and trails; and the award-winning Camelbeach Water Park is Pennsylvania's largest waterslide-themed amusement park.

The Pocono Mountains region of northeastern Pennsylvania is a 4-season outdoor playground covering 2,400 square miles of pristine scenic beauty. From luxurious resorts to family-oriented attractions, Monroe County is a popular vacation destination for residents of major northeastern urban centers including New York, Philadelphia, Baltimore, Washington D.C. and Harrisburg. Monroe County is dotted with sparkling lakes and streams and surrounded by gentle mountains, making it a haven for outdoor enthusiasts at all times of the year, as well as families and individuals looking for a tranquil retreat from hectic city life.

Commenting on the transaction, Mason W. Mednick, Executive Vice President of Milestone, indicated, "This transaction displays the hallmarks of the types of investments our company considers appealing: high barriers to entry, strong local demand generators, and a wide variety in size and type of meeting and conferencing facilities." Mednick continued, "With 152 guest rooms and more than 14,000 square feet of flexible meeting space, the property seamlessly transitions from a leisure/resort destination during the busy winter and summer tourist seasons to a regional conferencing and convention center serving large corporate, government, and state association group clients during the Spring and Autumn shoulder seasons."

Milestone currently owns and operates three other properties in the central Pennsylvania region: the Holiday Inn Harrisburg East (Harrisburg, PA), the Holiday Inn Harrisburg-Hershey (Grantville, PA) and the Best Western Inn Hershey (Hershey, PA). The acquisition of the Chateau Resort and Conference Center brings the Milestone Portfolio in the Pennsylvania market to four hotels representing 751 guest rooms and 64,000 square feet of meeting space.

Lea Ann Kish, Chief Operating Officer of Milestone Hospitality, said, "Monroe County has a rapidly diversifying economy with education, tourism, health care, distribution, manufacturing and service industries on the rise. The local lodging market benefits not just from the region's strong historical reputation as a leisure and resort destination, but from its vibrant and growing government, corporate, and state association demand generators, including the Tobyhanna Army Depot (the United States Defense Department's primary installation for the design, development, fabrication, repair and overhaul of Command, Control, Communications, Computers, Intelligence/Electronic Warfare, Surveillance and Reconnaissance systems), Pocono Medical Center, Sanofi Aventis/Aventis Pasteur, and corporate tenants of the Pocono Mountains Business Park."

Ms. Kish further advised that Joseph Lumpp, longtime Assistant General Manager of the Hilton Washington DC/Silver Spring Hotel, would serve as the General Manager of the Chateau Resort and Conference Center.

The $3.1 million renovation will impact the hotel's roof, parking facilities, lobby, banquet rooms, restaurant, elevators, recreational facilities, outdoor decking system, and each of the property's 152 guest rooms. The renovation will feature a comprehensive upgrade of the hotel's furniture, fixtures, lighting and accessories, as well as the addition of new wall and floor coverings throughout the property. Meeting and banqueting areas of the hotel will be completely renovated, with a strong focus placed on technological upgrades in order to meet the needs of an ever more sophisticated corporate and association clientele. In addition to high-speed internet accessibility, the renovated meeting facilities will feature state-of-the-art audio, video and media equipment capable of meeting a variety of presentational requirements.

A centerpiece of the planned meeting room renovation is the creation of a state-of-the-art "technology amphitheater" capable of accommodating approximately 80 meeting participants. Tiered seating will allow participants an unobstructed view of presentations, and will further provide individual electrical connections and "lighting on demand" at all seats/work stations. The room will furthermore feature wireless high speed computer accessibility, video conferencing capabilities, drop down screens, and advanced audio and lighting controls.

In addition to the Chateau Resort and Conference Center, Milestone Hospitality operates the Hilton Washington DC/Silver Spring Hotel (Silver Spring, MD); the Holiday Inn Harrisburg East (Harrisburg, PA); the Holiday Inn Harrisburg-Hershey (Grantville, PA); the Best Western Inn Hershey (Hershey, PA); the Best Western Gateway Adirondack Inn (Utica, NY); the Holiday Inn Utica (New Hartford, NY); the Microtel Inn & Suites (Sulphur, LA); the Holiday Inn Deland (Deland, FL); the Days Inn Busch Gardens Maingate (Tampa, FL); the Days Inn North Fort Myers (Fort Myers, FL); and a consortium of 4 Days Inn properties in Frankfort, Shepherdsville, LaGrange, and Fort Wright/Cincinnati, KY.





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