MeriStar's Disposition of Former San Pedro Marina Hilton Hotel Property Rejected by Harbor Board of Commissioners / August 2004

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MeriStar's Disposition of Former San Pedro Marina Hilton
Hotel Property Rejected by Harbor Board
of Commissioners

SAN PEDRO, Calif - Aug. 16, 2004 -- The Board of Harbor Commissioners last week voted against a resolution that would permit the transfer of operation of the Cabrillo Beach-area Marina Hotel on the San Pedro marina waterfront from MeriStar Sub 1A LLC to Cabrillo Hospitality LLC. After receiving port staff recommendation supporting the transfer, as well as written and verbal opposing views by community members, Mayor Hahn's office and Councilwoman Janice Hahn, the Commission expressed their disapproval

The Marina Hotel
2800 Villa Cabrillo Marina
San Pedro, California

of the transfer request.

"The Board feels that this particular proposal, in its current form, is not in the best interest of the Port and the San Pedro community," said Harbor Commission President Nick Tonsich. "The hotel sits on prime Port property in a beautiful marina-front location that will benefit tremendously in the coming years from the 'Bridge to Breakwater' waterfront development. This property deserves, and this Board expects, a total commitment of its operators to provide a first-class hotel experience for visitors as well as a solid anchor business and stable employer that benefits the local economy."

The Marina Hotel, located in the Cabrillo Marina area, was formerly a Hilton-affiliated hotel, but lost that affiliation as the performance and condition of the hotel deteriorated. Representatives of Cabrillo Hospitality LLC stated that they intend to invest $4 million in refurbishing the hotel, but that Hilton affiliation will not be re-sought.

Los Angeles Councilwoman Janice Hahn brought up additional concerns regarding potential for labor disputes and disruptions in service. Citing the City Council's current consideration of adopting a policy requiring "labor peace" provisions for hotels on public lands, Hahn said, "This agreement does not carry a labor peace clause. Because the hotel is on public Port land, the Port has an obligation to protect itself and the public from the threat of potential decreased revenues caused by labor disputes."

Also speaking on the issue of labor peace provisions at the Board meeting was Paul Rosenstein, former Santa Monica Councilman who experienced similar concerns in that city. He cited a letter sent to the Board of Harbor Commissioners on August 6, 2004 by Santa Monica Mayor Pro Tempore Kevin McKeown which stated that the labor peace provision between the City of Santa Monica and the Viceroy Hotel on City lands has proved sensible and led to a true partnership between the employees and management in upgrading the property.

The Marina Hotel is a 226-room hotel with restaurant, swimming pool and tennis courts. It is located at 2800 Villa Cabrillo Marina in San Pedro.

Contact:

Port of Los Angeles
Theresa Adams Lopez
310-732-3507

Also See:	MeriStar, Which Owns 89 Hotels, Reports Full-Year 2003 Net Loss of $388 million Compared with a Loss of $161 million a Year Earlier; Full-year RevPAR Declines 3% / Hotel Operating Statistics / February 2004
	MeriStar to Spend Approximately $225 million On Renovations At Its Core 73 Hotel Properties Over the Next Two Years; Taking Advantage of Size and Scale to Accelerate Renovations and Reduce Costs / February 2004

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