MYSURU: Lalitha Mahal, the second largest palace in the city and a favourite destination for film stars, is all set to close down.
The central government that took over Ashok Group of ITDC hotels in 1974, is no more interested in running the hotel and wants the Karnataka Government to take back the property.
The Union government's advisory panel appointed two months ago has submitted a report recommending the Centre to return the property to Karnataka government if it pays back the money spent on its expansion and renovation.
Though ITDC has a lease till 2023, the Centre that is incurring losses in running heritage hotels had given an option to Karnataka government to take over the property.
Sources said there was a meeting between the Union and State government tourism ministers and officials.
Lalitha Mahal palace was built by erstwhile Maharaja Nalwadi Krishnaraja Wadiyar in 1921 at a cost of Rs 13 lakh with Italian Palazzo and English manor architecture and stained glass ceilings.
ITDC which took over the hotel in 1974, added another 32 rooms to the 22, it had a swimming pool, banquet and dancing halls, a conference hall, water heater systems and a garden.
Its good maintenance and heritage value brought many high profile people like former Prime Minister A B Vajpayee, M G Ramachandran, J Jayalalithaa, Rajnikanth and other stars to stay in the majestic property at the foothill of Chamundi Hills.
The rent ranges from Rs 4,000 to Rs 40,000 for a room. Despite losses in the past, the hotel, during last financial year, made Rs 18 lakh profits.
The hotel also gave a dividend to Karnataka government but the proposal to hand it over to Karnataka government has left its 115 employees a worried lot.
Despite the Cauvery riots and demonetisation effect, the hotel is all set to achieve the target of Rs 75 lakh profit this year, said General Manager Joseph Mathias. He said they have opened the hotel for weddings and film shooting.
Though the hotel has made profit, it is the policy of the Union Government to hand it over to state government, he added.
As the S M Krishna state government had leased out Hotel Brindavan and Hotel Metropole to private players, the city was left with only one ITDC hotel.
Sources said many leading hoteliers and even politicians have shown interest and have started making enquiries to take the property on lease from Karnataka government.