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The Greenbrier Resorts Bankruptcy So Far Not Affecting the
 CSX Owned Westin Savannah Harbor Golf Resort and Spa
By Mary Carr Mayle, Savannah Morning News, Ga.McClatchy-Tribune Regional News

April 11, 2009 - A U.S. bankruptcy judge in Richmond, Va., on Wednesday approved financing and auction procedures for the sale of West Virginia's historic Greenbrier resort, leaving locals to speculate how that might affect the resort's sister spa at the Westin Savannah Harbor.

Nothing -- for now -- according to both Lynn Swann, director of public relations for the Greenbrier in White Sulphur Springs, and Mark Spadoni, general manager of the Westin Savannah Harbor Golf Resort and Spa on Hutchinson Island.

The Greenbrier, which is owned by Jacksonville, Fla.-based railroad company CSX Corp., filed for Chapter 11 bankruptcy protection last month. At the time, it announced plans to sell itself to hotel giant Marriott International Inc. for up to $130 million.

CSX also owns the Westin Savannah Harbor and its Greenbrier Spa.

"Our (bankruptcy) filing won't have any impact on the Greenbrier Spa in Savannah," Swann said earlier this week. "It should be business as usual there."

Spadoni agreed, though he hinted that some changes could be on the horizon, especially if the West Virginia resort becomes part of the Marriott.

"First and foremost, CSX has been a great owner for us," Spadoni said Friday. "We have every indication that they will continue to support the spa here, which, as the Greenbrier, has been a great branding for us for the last nine years.

"As for the future of our spa's affiliation, we will be evaluating whether we want to continue with that," he said.

The Westin, which is affiliated with Starwood Hotels & Resorts Worldwide Inc., may look at switching to one of Starwood's spa brands, such as the Heavenly Spa, now in 21 locations around the world, Spadoni said.

"We have a number of options available to us," he said. "With this pending sale of the Greenbrier to Marriott, it's an opportunity to review those options and make a decision that will be best for the future of our resort," Spadoni said.

Long a posh playground for the prominent and rich, the Greenbrier has lost more than $90 million in the past five years, including $35 million in 2008 as a nose-diving economy began sapping demand for luxury hotel and conference space.

Its liabilities total $107 million, while assets -- including a $3,823 potato peeler, a $205 fudge warmer, Beretta white onyx shotguns worth $6,666, a couple of machines that dry out swimsuits in seconds costing $2,182 each and a $3,740 pig cooker -- were listed at nearly $142 million, according to financial statements filed in advance of Wednesday's hearing.

A total of $94.9 million is owed to its owner. It also owes its hourly employees a total of $698,331 in wages, $134,022 in bonuses and $2.1 million for accrued vacation.

During a hearing in Richmond, Judge Kevin R. Huennekens gave final approval of $19 million in debtor-in-possession financing. CSX's agreement to the financing requires a new contract that satisfies Marriott or other potential buyers. If a deal isn't reached, the resort would default on the financing unless Huennekens intervenes.

Huennekens also set a June 12 auction date and June 17 sale hearing for the resort.

The Greenbrier also was given permission to pay nine nonunion employees their annual salaries totaling more than $1.1 million in the event that they no longer have jobs after the sale or the salary is less than they had previously been paid. Three other employees could receive a total of $97,000 in retention payments.

The decision came after objections from attorneys representing employees from nine unions and a short closed-door session that included testimony of Greenbrier Chief Financial Officer Michael McGovern.

Union attorney Joseph Guerrieri Jr. said the plan was "not consistent of sound business judgment" and questioned the payments when union employees were "facing severe reductions" in their upcoming contract.

Dion Hayes, an attorney for Greenbrier, told the judge that the payments would encourage employees to continue working through the sale and help ease the transition to the buyer.

Tom Botts, hotel and travel consultant for Hudson Crossing, said he's not at all surprised by a list of assets that includes a collection of firearms valued at $16,191 and a fleet of more than 100 vehicles, including a 1954 Oren Special fire truck and a GMC street sweeper, valued at $287,181. Its collection of linens is worth about $649,000, while its fleet of golf carts is worth nearly $253,000.

"It's in the middle of nowhere," Botts said. "It essentially functions as its own little town."

The 6,500-acre resort, site of a Cold War nuclear bunker for Congress, features a 721-room hotel, three championship golf courses, indoor and outdoor tennis courts and its 40,000-square-foot spa.

Overnight rates range from $275 for a guest room to $900 for the presidential suite with seven bedrooms and private baths.

Botts said many of the resort's assets speak to the sheer size of its grounds and accommodations.

"The number of rooms there is just jaw-dropping," he said. "You can rent everything from a cottage with four rooms to a grand mansion that has its own kitchen, dining room and bedrooms. It is very much the old-style aristocratic kind of resort."

As for the $3,823 potato peeler? Botts said that probably comes from having to be able to serve 150 to 250 servings of mashed potatoes at one time.

"It really is a hotel like none other I've been to," he said. "It's a blast to the past. It's a trip."

The Associated Press contributed to this story.

ON THE WEB

--www.greenbrier.com

--www.westinheavenlyspa.starwoodpromos.com

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To see more of the Savannah Morning News, or to subscribe to the newspaper, go to http://www.savannahnow.com.

Copyright (c) 2009, Savannah Morning News, Ga.

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