As reported by The State this venerable hotel at the corner of Main & Lady Streets will be converted into a upscale condo called The Palms with 54 "resort-style" units. They will also have a view of what is apparently the only pool on Main Street.
Given that the article talks about the developer struggling to find financing for the project for several years, and the fact that the Rodeway Inn is listed in the Feb 2011 phonebook, I can only guess that the developer owned the property and continued to run it as a hotel until things came together. I admit to being surprised how long it lasted as a mid-to-lower-mid market motel in an area that if it gets anyone (after all who in the general population wants to visit Columbia and stay on Main Street?) would get high-roller business and government connected types.
(Hat tip to commenter Tom)
UPDATE 26 May 2012: Here's a State article on the opening of The Palms.