When all accomodation in Negombo (this hotel included) was booked out, its owner put me up privately with his family. The staff went out of their way to help make my stay truly memorable. It's great to hang out on the rooftop - the highest in Negombo -, which has a pool along with a bar. The rooms too were perfectly fine (I've seen two of them). As of 2012, I can definitely recommend this place, which - judging from the older reviews - seems to have changed a great deal.
