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Resolution of Financing Issues Revives Stalled Hilton Hotel & Conference Center in Scranton, Pa.; Capital Hotel Management to Asset Manage 

 
BEVERLY, Mass., December 18, 2002 � Capital Hotel Management (CHM), a leading hotel and resort asset management and investment firm, today announced that it has signed a contract to asset manage the Hilton Hotel & Conference Center in Scranton, Pa. 

The 175-room, nine-story hotel began construction in 1999, which subsequently stalled in 2001 due to financing issues.  The hotel now is scheduled to open in July 2003. 

CHM was engaged by the project�s lenders, Spectrum Origination LLC, to serve as an integral part of the project�s revival team.  Spectrum Origination LLC is an affiliate of Spectrum Investment Partners, LP, a New York City-based hedge fund that invests in high yield asset based loans and distressed securities.  During the construction phase, CHM will provide asset management services to help oversee the project�s completion, pre-opening sales and marketing and coordination between general contractor William H. Lane Inc., hotel management company Ellis Management Corp, franchisor Hilton Hotels Corporation, architect Highland Associates and interior designer HVS Compass.  Upon completion, CHM will assume a more traditional asset management role, working with the hotel operator to ensure a successful opening and to minimize risks associated with the traditional hotel ramp-up period. 

�Capital Hotel Management has a proven track record in asset management and brings the right combination of strategic vision and operational understanding to help ensure the project�s success,� said Jeffrey Schaffer, managing member of Spectrum Group Management LLC, which is general partner of Spectrum Investment Partners, LP.  Schaffer co-manages the fund with Andrew Kurtz.

�Hotels opening during this phase of the real estate cycle face many challenges, particularly conference centers, which are quite unique from transient hotels,� said Ken Wilson, CEO, Capital Hotel Management.  �We believe Spectrum�s decision reflects a trend among real estate owners and investors to seek more experienced hospitality asset management during these challenging economic times.  Comprehensive, knowledgeable asset management is the best way to ensure that a property realizes its full economic potential.  We have extensive experience with public-private partnerships and hotel operations and look forward to helping to bring this project to fruition.�

Located at the corner of Adams and Lackawanna Avenues, the full-service property occupies the former site of the historic Hotel Casey.  The Hilton Hotel & Conference Center will feature 175 guest rooms and approximately 30,000 square feet of dedicated, state-of-the-art meeting and banquet space, including 19 meeting rooms, a 7,000 square foot ballroom and a 74-seat amphitheater.  The hotel was designed in accordance with the International Association of Conference Centers, which requires compliance with more than 30 stringent standards, and will receive certification upon opening.  Hotel services and amenities include a 136-seat restaurant, including a private dining room, lounge, swimming pool and fitness center. 
The $35 million project is heavily supported by the city, which is sponsoring a multi-million dollar renovation of a nearby parking garage, donating public land and has awarded a  $10-million state grant to this public-private partnership.  The hotel is estimated to generate approximately $5.8 million in visitor spending annually and $650,000 in local taxes. 

Capital Hotel Management, headquartered in Beverly, Mass., is a full-service asset management company specializing in upscale hotels and resorts.  Currently, the company�s portfolio includes assets valued at more than $1 billion and comprising nearly 10,000 rooms.  CHM provides asset management and investment advisory services for such well-known hotel real estate investor groups as Blackacre Capital Management LLC, General Motors Corporation, Berwind Property Group Ltd, and others.  CHM currently asset manages 13 properties in California, Washington, D.C., Florida, Georgia, Hawaii, Illinois, Michigan, New York, Pennsylvania, Texas, and the U.S. Virgin Islands.  For more information on Capital Hotel Management, visit their website at www.capitalhotelmgt.com or contact them at (978) 522-7000.

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Contact:
Jerry Daly
(703) 435-6293
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Also See: Lodging Unlimited Retained to Manage properties in Virginia and Pennsylvania / Aug 2002
Michelle Gehman, GM of the Hilton Garden Inn Lancaster in Pennsylvania, Receives the Brand's First General Manager of the Year Award / Jan 2002


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