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Shubh Hotels Intends to Complete $25 million Renovation of the 713-room Pittsburgh Hilton Hotel;
Some Problems Surface with Delinquent Hotel/motel Taxes and Filing of Mechanic's Liens
By Ron DaParma, The Pittsburgh Tribune-ReviewMcClatchy-Tribune Regional News

July 19, 2008 --The owner of the Pittsburgh Hilton Hotel owes Allegheny County about $100,000 in delinquent hotel/motel taxes and late fees, and faces liens and lawsuits from contractors and others seeking tens of thousands of dollars more, according to local officials and public records.

However, officials of Shubh Hotels of Florida vowed Friday that they will pay their debts and complete the $25 million renovation of the 713-room hotel at Gateway Center.

"We've already spent millions of dollars on the renovation and cash flow is obviously tight," said Tim Zugger, general manager of the city's largest hotel. "But there will be a strong future for the Pittsburgh Hilton Hotel in Pittsburgh."

"We plan to make it a great hotel. It's in a great location and we know the business is there, but we just need to get caught up and we are doing what needs to be done," added Harris Mathis, chief operating officer of the Boca Raton, Fla.-based company.

"They owe approximately $70,000 in hotel/motel taxes for March of 2008, and they also owe us penalty and interest from the months their payments have been consistently late," Allegheny County Treasurer John Weinstein said yesterday.

The late charges date to December and total about $25,000, according to Weinstein, who said the county Controller's Office is conducting an audit to confirm the exact amount owed.

"They are well aware of the delinquencies they owe, because we've communicated that to them," he said. "However, they are current on the real estate taxes."

In addition to the county delinquency, documents filed with the county Prothonotary's Office show contractors and others have filed liens and lawsuits against the company over alleged delinquent payments.

Those include a mechanic's lien in the amount of more than $294,377 filed by Youngstown Design Co. PC, the Youngstown, Ohio-based architect for the project, and Cuddy Roofing Co. Inc. of Thornburg for $9,979, plus interest and penalties, for roof repair work from September through December.

Records show Shubh settled a $62,386 mechanic's lien filed by Atlas Wholesale Supply Inc. of Carnegie for construction materials.

Mathis said Shubh intends to make the taxes a top priority and hopes to make good on its other debts, including Youngstown Design, which he said continues to work with Shubh in Pittsburgh and on other hotel projects elsewhere.

Officials of Youngstown Design could not be reached for comment.

Shubh made good on a pledge yesterday to pay its 250 hotel and restaurant employees their regular wages.

The payment avoided a possible work stoppage by Unite Here, the union representing the workers. The union on Thursday expressed concern that the payments would not be made.

"Our workers were paid today, and they reported for work and they will continue to report for work," Sam Williamson, Western Pennsylvania director for the union's Pennsylvania Joint Board, said yesterday. "It looks like a potential crisis has been averted for the foreseeable future."

Mathis acknowledged the company has had problems paying its bills, some of which he attributed to unexpected cost increases.

A union official said that resulted in periodic work stoppages by various contractors, but he said Shubh agreed to a payment plan and the workers had returned to work.

Shubh has completed a major portion of the hotel's interior, including renovation of about 640 of the 713 guest rooms and bathrooms, installation of a new heating, air conditioning and ventilation system and replacement of all of the hotel's windows. Officials hope to have the rest of the rooms completed within about five weeks.

However, a major addition along Commonwealth Place probably won't be completed until spring instead of the end of this year as planned, Mathis said.

Contractor P.J. Dick Co. recently withdrew its workers from the site, but Mathis said that occurred because design changes delayed Shubh from ordering steel for the project. The steel had to be fabricated to adhere to the design changes, he said.

Shubh hopes to have sufficient funds in place to resume work by the end of the month. P.J. Dick declined to comment yesterday.

The addition is to include an indoor glass-enclosed swimming pool built on the top floor of a 17,000-square-foot addition facing Point State Park. It would connect into the fourth-floor guest room level where a health club will be located. The wing is to provide additional meeting and banquet space on the lower two levels.


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