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SEATTLE-Due to a conflict of interest, the owner of the historic Sorrento Hotel here is going to self-manage the asset. The change will occur next month. The conflict is that the existing third-party manager, MTM Management, has agreed to manage a boutique hotel that will open nearby in 2006 and is expected to compete for tenants. In addition, the Sorrento co-owner who will be taking its management in-house, Michael Malone, also is the majority owner of MTM Management, though not for long.In addition to ending MTM’s contract for the Sorrento, Malone will be selling his 32.5% stake in MTM. MTM chief executive Jim Treadway tells GlobeSt.com that he and principal James Simkins will each buy an additional 5% of the company from Malone and the remainder will be acquired via leveraged buyout. As a result, Treadway says he will own 47% of the company, Simkins will own 20% and Craig McCaw will continue to own about 11%. Malone was out of town and unavailable for comment.MTM also manages four other properties in the region, including one in Woodinville that is owned in part by Malone. MTM will keep the management assignment for that asset because it does not directly compete with the Sorrento. The new hotel expected to compete for guests with the Sorrento is Hotel 1000, a boutique luxury property slated to open for business next summer. The Sorrento is also considered a high-end boutique hotel.

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