News for the Hospitality Executive
|By Mark Pazniokas, The Hartford Courant, Conn.
Knight Ridder/Tribune Business News
Jan. 7, 2004 - Mayor Eddie A. Perez designated the Waterford Group as the preferred developer Tuesday to purchase and renovate the city's largest hotel, the 390-room Hartford Hilton.
A screening committee ranked Waterford's $28.5 million plan to buy and overhaul the aging downtown hotel at 315 Trumbull St. as the best proposal submitted by five competing developers.
Under the fast-track timetable set by the city, Perez and Waterford's chairman, Len Wolman, have until Jan. 17 to finalize the terms of a purchase and sales agreement.
Waterford's takeover of the troubled hotel under conditions set by the mayor would be a political coup for Perez in the early weeks of his first term as strong mayor. Earlier plans by another potential buyer called for the hotel to be closed for more than a year while it was being renovated.
But Perez was not celebrating Tuesday.
"I don't celebrate until we get it done. We're on first base, and we want to keep moving," Perez said.
The deal would give Waterford, the developer of the 409-room Marriott under construction with a downtown convention center, 800 rooms to offer convention planners.
Waterford promises to meet two goals set by the mayor: keeping the hotel open during renovations and retaining the Hilton's unionized workers, most of whom live in Hartford. It already has signed an agreement to honor the workers' existing contract, news the union will share with its members today.
"We feel good that the new political leadership of Hartford has stepped up to the plate here in a huge way," said Steve Mathews, director of the hotel and restaurant workers union in Connecticut. "It is very, very significant what the Perez administration has done."
The Hilton is privately owned by MeriStar Hospitality, but the hotel was constructed on city land under a 99-year lease that gives Hartford a short period to match any sales offer.
Perez decided to exercise the lease provision last month after MeriStar signed a $6 million deal to sell the hotel to The Procaccianti Group, a nonunion company that wants MeriStar to close the hotel and dismiss its unionized workforce as a condition of the sale.
Procaccianti intended to keep the hotel closed for at least a year while it completed a $15 million renovation. Perez said the company refused to discuss keeping the hotel open or retaining its workers.
Waterford was one of five developers that responded to Perez's call for proposals to buy the Hilton and one of three deemed qualified to handle the project. The others were Northland Investment, the redeveloper of the adjacent Civic Center Mall, and SHUBH of Boca Raton, Fla.
"I feel all three bids are qualified bids," Perez said.
Waterford would pay $6.15 million to buy the hotel, then invest $19.4 million in renovations. With so-called soft costs, including nearly $1.6 million in projected operating shortfalls caused by running the hotel during construction, the total purchase and renovation budget would be $28,450,000.
The company would receive no tax abatements or other public assistance.
Its partners on the Hilton project would include Philip Schonberger, a Hartford developer who collaborated with Waterford on the development of a 120-room Residence Inn by Marriott in downtown Hartford's Richardson Building.
Perez said he would take the next 48 hours to review elements of Waterford's proposal with Wolman, including its financing. Then he will take the Wolman deal to MeriStar and ask the company to keep the Hilton open until ownership could be transferred in March.
Wolman said his company's plans to acquire the Hilton will not affect its long-term commitment to add 288 rooms to its 409-room convention hotel, the Marriott Hartford Downtown. The first phase would open with the convention center in 2005. No deadline is set for the 288-room second phase.
The Hilton renovations also could be completed by spring 2005, Wolman said.
"It would be positioned a little differently from where the Marriott would be," Wolman said of the Hilton. "The Marriott would be right at the top. This hotel would be positioned just beneath that. We would have two, full-service, first-class hotels."
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(c) 2004, The Hartford Courant, Conn. Distributed by Knight Ridder/Tribune Business News. HLT, MAR,