|By Andrea L. Stape, The Providence Journal, R.I.|
Knight Ridder/Tribune Business News
Dec. 18, 2004 - At least two established Rhode Island developers and several national developers are among the 15 bidders that submitted proposals to buy the Providence Westin and build a new hotel next door.
The list includes The Procaccianti Group of Cranston, owner of the Holiday Inn in downtown Providence, and Carpionato Properties of Johnston, owner of the The Crowne Plaza in Warwick.
Also on the list is Richard L. Bready, chief executive of Nortek Inc., a Providence company, who made a joint bid with Jerrold L. Lavine, former chairman of the Rhode Island Solid Waste Management Corporation and director of administration for former Gov. Bruce Sundlun.
Others bidders include LaSalle Hotel Properties of Maryland, which owns the Hotel Viking in Newport; Starwood Properties of New York, which manages the Westin; and Host Marriott Corp., a national hotel developer based in Maryland.
The Rhode Island Convention Center Authority, the quasi-public agency that oversees the Westin Providence, yesterday disclosed the names of the bidders after a Superior Court judge ordered the agency to make public the names at the request of The Providence Journal.
The authority, which is funded by taxpayers, had kept the names secret since the proposals were submitted last month. The authority didn't want to publicly identify those interested in buying the taxpayer-owned hotel because the disclosure could "influence the sales process" and possibly chill the bidding, according to James McCarvill, executive director of the Rhode Island Convention Center Authority.
David A. Duffy is chairman of the authority's board, which also includes George Nee, vice chairman; Joseph Judge, treasurer; Paul MacDonald, secretary; Brad Waugh; Dave Gavitt; Dale Venturini; and Gerald Massa.
Superior Court Judge Daniel Procaccini yesterday morning ordered the authority to release the information. Late yesterday afternoon -- five hours after the order was issued -- the authority's law firm, Adler Pollock & Sheehan, released the list of names to Blish & Cavanagh, The Journal's law firm.
The one-page list included names of bidders, but no identifying information; it did not state the amount the bidders are offering.
The authority put the four-star hotel in downtown Providence up for sale in September. The authority decided to test the market to determine what the Westin could be worth after more than a dozen hotel developers expressed an interest in buying it, McCarvill said.
The authority is scheduled to decide on a buyer for the hotel on Wednesday during its monthly board meeting, according to McCarvill.
The authority has winnowed the list of bidders from the original 15, but has declined to say how many remain or who they are.
The authority has not released the price it is willing to consider for the hotel.
Once the finalist is chosen based on its bid, complete proposal and reputation, the authority will negotiate the final price and conditions of sale, McCarvill said.
Currently, the state owes about $285 million on the hotel and the adjacent Rhode Island Convention Center. In the early 1990s, the state issued $354 million in bonds to build the two facilities. Profit from the hotel, which had a net income of $8.9 million in fiscal 2004, is used to service the debt each year. In addition, the state spends $17 million a year subsidizing the hotel and the convention center.
Selling the Westin alone may not generate enough money to pay off the bonds, so the authority is requiring that any potential buyer of the Westin also promise to build a 200-room hotel tower on the adjacent small, grassy plot between the Westin and the corner of Sabin and Francis Streets, said McCarvill.
Last month, when the offers on the hotel were initially due, the authority decided not to release the names of the bidders, citing a state law that allows the shielding of some discussion about the sale of public property.
A Journal reporter made several requests for the names of the bidders and their offers.
After the authority continued to turn down the requests, The Journal this week sued the authority in Superior Court for the information. Yesterday, Judge Procaccini ordered the authority to release the list of bidders.
The Journal has also asked the court to require the authority to release how much each bidder is offering for the hotel. Joseph V. Cavanagh Jr., managing partner of Blish & Cavanagh, has requested a court hearing about the bid amounts to be scheduled for early next week.
"It's unclear to me the specific reason or reasons why they are refusing to provide the amount of the bids," Cavanagh said. "As I understand it, the bidding has been closed and it's difficult to see how in any way the process would be compromised."
The authority said it would not release the amounts of the bids because a specific request for that information was not made by The Journal when the original request was made for the list of bidders, Cavanagh said. Consequently, the authority argued it has 10 days from yesterday to respond to the request for bid amounts, Cavanagh said.
The authority's lawyer is arguing that The Journal's request under the Open Records Law was not expressed appropriately because the newspaper asked for bid information instead of bid documents, according to Cavanagh.
"It's disappointing that we are only able to get the names after filing a lawsuit," Cavanagh said.
The bidders for the Westin Providence are:
--Carpionato Properties, which also owns the Holiday Inn Express & Suites near T.F. Green Airport in Warwick.
--Cornerstone Real Estate Advisers Inc. of Connecticut. The company was established in 1994 to provide private real-estate equity investment management services for its parent company, Massachusetts Mutual Life Insurance Co., according to the company's Web site.
--Eagle Hospitality Properties Trust Inc. of Covington, Ky., which plans to qualify as a real-estate investment trust, or REIT, and holds interests in hotels in Colorado, Florida, New York, Kentucky, Ohio and Illinois, the company said in a statement. The company's properties operate under a number of names, including the Embassy Suites Hotels, Marriott, Hilton and Hyatt brands, the company said in a document filed last month with the U.S. Securities and Exchange Commission.
--FaulknerUSA, of Texas, a development and construction firm.
--Host Marriott Corp. of Maryland, a national hotel operator. It owns a number of hotels in Massachusetts, including The Boston Marriott Newton, The Hyatt Regency Cambridge, the Boston Marriott Copley Place, and the Hyatt Regency Boston.
--Hotel Capital Advisors Inc. of New York City. The company's principal is Simon M. Turner, who sits on the board of the Four Seasons Hotels & Resorts.
--INTELL Management and Investment Co.
--Richard L. Bready, head of Nortek, which was sold last year to a New York investment firm, Kelso & Co. Lavine, at the time he joined the Sundlun administration, was the owner of Southporte Group, a consulting and investment firm.
--Kennedy Associates Real Estate Counsel Inc., of Seattle, Wash., a real-estate investment adviser. Its clients include three funds, one of which acquires hospitality properties.
--LaSalle Hotel Properties.
--Magna-CB Ventures LLC.
--Shubh Hotels of Florida, a manager of hotels in Florida, North Carolina, New Jersey, New York, Connecticut and Massachusetts.
--Starwood Hotels & Resorts Worldwide of New York, a national hotel operator. The convention center authority had to offer Starwood the chance to place a bid on the hotel. Starwood is currently contracted to manage and run the hotel, and until its contract expires in May, Starwood is allowed to counter any bid, according to McCarvill.
--The Procaccianti Group, which also owns a number of other hotels in Rhode Island and elsewhere in the country.
-- Westbrook Acquisitions LLC.
Staff writers Lynn Arditi, Paul Grimaldi and Neil Downing contributed to this report.
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