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Sault's Water Tower Inn sells for $19.5 million

J.J. Hilsinger and daughter Donna continue to manage the Water Tower Inn, with J.J. now designated as brand ‘ambassador’ under new ownership

Sault Ste. Marie's iconic Water Tower Inn has been sold by founder J.J. Hilsinger to a company that owns three hotels and five restaurants in Alberta and British Columbia.

A SooToday review of land registry records shows ownership of the Great Northern Road landmark was transferred just before Christmas to Etobicoke-based Days Hoteliers Inc.

Purchase price was $19.5 million, with $2.8 million paid in cash and $16.7 million mortgaged back to Hilsinger's company, JJ's Hospitality Inc.

A week later, that mortgage was discharged and Days Hoteliers got a new mortgage for $50 million from Canadian Western Bank.

Sault lawyer Gord Acton from Wishart Law Firm represented Hilsinger in the transaction.

Hilsinger and daughter Donna continue to manage the 176-room Water Tower Inn, with J.J. now designated as the brand "ambassador."

Days Hoteliers does business as Days Hospitality Inc., owning Ramada hotels in Prince George and downtown Calgary, and a Doubletree by Hilton in West Kelowna.

Six days after buying J.J.'s hotel, Days Hoteliers also purchased the 84-room Travelway Inn in Sudbury.

Two key executives leading Days' Ontario expansion have Northern Ontario roots.

Days' president Scott McPhail was born in Dryden and finished high school in Sudbury.

McPhail then studied at Laurentian University, working a summer job at Bell Telephone.

"I would drive a materials truck once a week to Elliot Lake and then the odd time I'd end up in the Sault," he told SooToday.

Mary-Jane Hannah, who's been vice-president of operations at Days Hoteliers for almost a decade, was born and raised in Sault Ste. Marie.

"Mary-Jane Hannah's family is the Boston family. They owned Boston Motors. She had a lot of deep roots and family connections in Sault Ste. Marie," McPhail said.

Hannah's family also owned two restaurants.

"I was brought up through the business, and I believe it was ingrained in me and in my blood to serve and help make people healthy," she said in an interview in 2013 when she was named one of the Prince George Chamber of Commerce's Top 40 Under 40.

"She and I would talk often about acquiring properties and developing properties in Ontario," McPhail said.

Jimmy John Hilsinger started out not as a hotelier, but as Sault Ste. Marie's patriarch of pressure-fried chicken.

You'll still find old-timers around town who refer to KFC as "J.J.'s Chicken."

Arriving here during the 1960s, Hilsinger bought a run-down drive-through at the corner of Great Northern Road and Second Line.

He secured the rights to a fast-food chicken franchise few Saultites knew anything about, and started hustling steaming bucketfuls of "J.J.’s Carry-Out Kentucky Fried Chicken."

His fledgling chicken empire soon grew into five KFC outlets, with Jimmy John next dreaming of a hotel: something approaching an urban destination resort for the price of a room.

The Water Tower Inn opened in March 1974 adjacent to the first J.J.'s Chicken location.

It was the first Sault hotel to offer such newfangled features as a swimming pool, a whirlpool honeymoon suite, even interior corridors.

There were several big additions over the years, and the Water Tower Inn will celebrate 50 years of hospitality next year.

In 2019, Hilsinger listed the property for sale, and McPhail and Hannah were immediately interested.

"We kind of kicked the tires," McPhail recalls.

"We didn't really come to the property but we certainly looked at the numbers, talked to the realtors. It was on our radar."

But J.J. got cold feet and he withdrew the listing.

By the fall of 2021, the hotel was once again for sale.

"That's when we got more interested," McPhail says.

The potential purchasers arranged to interview Hilsinger, but soon found themselves being interrogated by him.

"He was very concerned about having someone who had the same kinds of values and interests, the same long-term views.

"He wanted to make sure his staff were treated the same way he treated staff. The same community involvement. To appreciate that it was a Sault Ste. Marie hotel with all the values associated with that.

"He wasn't going to sell to anyone unless he felt comfortable that they were going to run it the same way that he had.

"Since COVID, the hotel has performed very well. The Sault Ste. Marie market has been a strong market. We were very interested to do a deal with J.J."

But Hilsinger was a tough sell.

"It took us a long time. J.J. had his own ideas of what he wanted," McPhail says.

"He's got a lot of involvement in the community. He wanted to make sure that those involvements continued. 

"He had some charitable things that were important to him. He wanted to make sure that those were continued as well. We checked all those boxes for J.J."

McPhail believes Mary-Jane Hannah's deep roots in Sault Ste. Marie, combined with her family connections, helped close the deal.

"I love J.J....He and I spend lots of time together. He's sharing his visions of the world with me. We're on the same page. 

"We're not going to do anything to dramatically change anything that the hotel does.

"We'll update and improve as the years go on because you have to invest in hotels. You have to replace carpet. You have to make sure that the building is in good shape.

"I think the value's in the way J.J. operated. That's how we're going to continue to do it."

"I can't speak for him, but I think he's got some ideas of what he wants to do with his post-retirement, but he's not leaving the hotel. He's going to continue to be involved."

— SooToday