Aug. 28, 2008 - CEDAR RAPIDS -- The fourth manager to leave the Crowne Plaza Five Seasons Hotel in Cedar Rapids since it was acquired by the Kronos Hotels just more than a year ago said he regrets how employees at the financially hobbled hotel operation have been treated.

Many employees haven't been paid this month, said Dave Hockenberry, and have stayed on despite numerous bounced paychecks, shrinking staff levels and facilities problems caused by the parent company's repeated failure to pay vendors. Their health insurance benefits have lapsed since June, but the company has kept collecting the employee portion of premiums.

The veteran hotel manager said the staff often impressed him during his seven-month tenure, and the employees were his only reason for staying on after a series of mounting frustrations with Marietta, Ga.-based Kronos.

"They're tired, worn out, and at this point in time many of them haven't been paid in quite a while," Hockenberry said.

He said he couldn't pay employees because he did not have control over disbursement of the hotel's revenues, which went to the accounting department. That department reported only to the parent company, he said, and the home office decided how much money would go to each of its hotels' accounts.

The number of employees at the hotel has shrunk from 175 when Hockenberry joined the staff in late January to 100, he said. Almost all management staff who were at the hotel when he started have resigned or been terminated.

Kronos spokesman Peter Mathon has described the employee payment problems as glitches associated with a change in payroll providers. The company also said last week that the temporary loss of its license to operate as a Crowne Plaza property was the result of an accounting problem at the licensing company, Intercontinental Hotels Group of England.

Iowa Department of Revenue spokeswoman Renee Mulvey confirmed that the hotel is delinquent on state payroll and sales taxes. The Iowa Department of Revenue has placed four liens totaling $407,146.98 on the property.

In discussions with creditors, Hockenberry said, Kronos has repeatedly used the June flood in downtown Cedar Rapids as its explanation for payment problems. He said that was usually not the case, as most of the problems resulted from the company's failure to make needed investments or pay creditors on time. The hotel has not reopened its restaurants since the flood because, among other problems, most of the kitchen staff has left and improvements required to meet health inspections have not been funded.

Mathon earlier said Kronos is investing $1 million to upgrade the hotel and has not laid off employees despite a difficult economic environment for hotels.

Hockenberry confirmed that many rooms have been upgraded, but he said key parts of the refurbishing required by the company's air rights lease agreement with the city of Cedar Rapids have not been met. They include badly needed refurbishing of the lobby and meeting rooms that will cost more than $1 million.

-- Contact the writer: (319) 398-8317 or [email protected]

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