News for the Hospitality Executive
|The Hartford Courant, Conn.
Knight Ridder/Tribune Business News
Dec. 31, 2003 - The Hastings Hotel and Conference Center in Hartford, where Bill Clinton stayed during the 1996 presidential debate, closed abruptly Tuesday, stunning guests, hotel workers and tenants.
Business tenants and guests were given just a few hours to pack up their belongings, as the owners moved to file for Chapter 7 bankruptcy protection because of "continued weak market conditions."
The hotel was still accepting reservations for rooms and dinner as of midday Tuesday. Just a few hours later, about 150 workers found out they would lose their jobs.
Some cried. Some said they were too stunned to talk. Some of the newly unemployed asked how they'd pay their household bills. And some said they were incredulous the Hastings could close on such short notice.
"I thought the management was first rate and the business really seemed to be picking up," said Christine Dunsford, the departing concierge at The Hastings, who lost her job at the Hartford Hilton in November. "It's never a good time to find a job in an emergency."
The sudden closing also caught city and economic development officials by surprise. At 5 p.m. the hotel managers walked into Mayor Eddie A. Perez's office with a letter saying that all the hotel employees would be laid off in a matter of hours.
The report was troubling, Perez said, but one that the city could do little about on such short notice.
"They decided not to have this discussion with us," Perez said of the owners, whom he tried to call for further information. "We were given no chance to even analyze what the problem is."
Still, he said, the closing of the Hastings was not a bad omen for Hartford tourism since it is a hotel that was intended for a niche of business travelers, not tourists.
The loss of the Hastings wouldn't derail the momentum of economic revival in Hartford, economic officials say.
"It's always a step backward when something like this happens, especially when there are jobs involved," said Oz Griebel, president of the MetroHartford Alliance. "But there's a lot going on here. Hopefully, there will be a new owner."
The closing was announced by property manager Dolce International, which said in a prepared statement that "the property will close for an indefinite period of time, effective immediately."
Paul Dolce, the Hastings general manager, said it was possible that workers could find jobs elsewhere at the company's other hotels. Dolce International has managed the Hastings for three years. He wouldn't comment on severance for employees.
The hotel and conference center will revert to Aetna, which holds the mortgage on the 271-room and 55,000-square-foot conference center, according to Aetna spokesman Fred Laberge.
The owner, Dallas-based Olympus Real Estate Corp., owes Aetna more than $7.5 million on the mortgage and is delinquent on the payments, Laberge said. Laberge declined to say how much is past due or how long the money has been overdue.
The original mortgage dated March 30, 1998, has been re-worked a couple of times in the past year or so to give Olympus more time and "to try to make this work," Laberge said.
"This was their decision," Laberge said of the Chapter 7 move. "We did not force them to take this action."
Aetna doesn't expect to continue operating The Hastings itself and may sell the building, but hasn't made any decisions yet, Laberge said.
Olympus could not be reached for further comment late Tuesday.
The Hastings caters to business travelers and corporate training -- and had been hit hard by the downturn in business travel after Sept. 11, 2001. It also suffered from its location on Sigourney Street, outside the city's central business district, some said.
But sources said the Hastings was gearing up for a strong year of bookings.
A source familiar with the Hastings said the hotel had an average 40 percent occupancy in the past year, far below the 75 percent that is considered strong for city hotels.
But the source said the hotel did have close to 20,000 room nights booked for 2004, capturing some business that had been displaced from the Hilton downtown. The Hilton may close for 18 months for renovations.
Suzanne Hopgood, a Hartford-based corporate turnaround specialist and hotel consultant, said the Hastings may have been seeing a recovery, but not enough to get out from under its losses of recent years.
"When you get way behind, sometimes 'coming back' isn't soon enough," Hopgood said. "I don't think it has anything to do with the future, I think it has to do with the last two years."
Several businesses in the Hastings building felt the sting of the closing. Like the luckless hotel workers, the franchise owners, managers and employees at LAZ Parking and Thrifty Car Rental were told Tuesday afternoon they had to close up shop by midnight.
"I've never heard of anything like this. This could kill us. There was no due process. They just told us at 2:30 [p.m.] that we've got to leave by the end of the day," said Joseph Schwartz, president of the Thrifty Car Rental franchise at 211 Farmington Ave.
A Hartford-area bankruptcy attorney said he found it strange that the managers of the hotel would evict guests and tenants. Normally, he said, after a Chapter 7 bankruptcy filing is made, a trustee is appointed to manage the business. It is up to the trustee and the judge to decide whether to run the business, sell it, or to evict tenants.
It is possible, the attorney said, that once this case goes into bankruptcy court, the Hastings could be reopened by the trustee. The attorney asked not to be identified.
The abrupt notice forced Schwartz, his partner, and two employees to quickly clean out their offices. They had to paste a sign on the front door that would tell existing customers -- and would-be customers -- how and where to pick up and drop off rental cars. They also had to scramble to find new office space. And, they had to find secure parking spaces for the franchise's fleet of 50 cars. Other franchise offices in Westbrook and Groton are too far away to serve customers in the Hartford area, Schwartz said.
"We've got some customers renting our cars through the end of next week. How are they going to know where to drop off the cars? How are we going to get ahold of them? This is going to be tough," Schwartz said.
At LAZ Parking, the notice to evacuate was also swift, said the two employees who ran the Farmington Avenue office.
"We just signed a five-year contract with them. We had 232 spaces for the hotel guests, and we had a valet service for cars that had to be parked in other places. Now it's gone. We've got nothing," said Alex Belayneh, manager at the LAZ Parking office.
As Belayneh stuffed papers into bags and boxes -- and awaited word from Hartford headquarters as to where he might work for the remainder of this week -- his colleague shook his head.
"I literally just got here. I started work [Monday]. When [Belayneh] told me we were closing, I thought he was kidding," said Danny Miranda, a Hartford resident on winter break from Capital Community College.
"I never planned to do this work for the rest of my life. Now I am sure that will be the case," said Miranda, who is studying business management at Capital Community College.
By Kenneth R. Gosselin and Matthew Lubanko. Courant Staff Writers Oshrat Carmiel, George Gombossy, Dan Haar, Diane Levick and Stacy Wong contributed to this story.
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(c) 2003, The Hartford Courant, Conn. Distributed by Knight Ridder/Tribune Business News. AET,