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Kennedy Associates Real Estate Counsel LP to Close the 466-room
Wyndham O'Hare Hotel in Chicago on January 1, 2010:
Unite Here Union Seeking Delay of Shutdown

By Julie Wernau, Chicago TribuneMcClatchy-Tribune Regional News

Dec. 23, 2009--The Wyndham O'Hare at Rosemont will close a week from Friday, leaving about 107 union employees out of work in the new year, according to a union official.

The closing of the 12-floor, 466-room hotel comes at a time of declining revenue in the hotel industry and a struggling convention industry in Chicago.

Unite Here is fighting to delay the Jan. 1 shutdown because the hotel did not give a 60-day notification to the employees under the Worker Adjustment and Retraining Notification Act, said Bill Biggerstaff, a spokesman for Local 450.

The property is independently owned and operated by Kennedy Associates Real Estate Counsel LP, a Seattle-based pension fund adviser, under a franchise agreement with Wyndham Hotels and Resorts.

Jack vanHartesvelt, executive vice president at Kennedy, said the O'Hare area is the third-worst market in America for hotels. The hotel defaulted on a loan at the same time that the bank holding the loan was one of the FBOP Corp. financial institutions seized in October, vanHartesvelt said. The new owner of the loan, U.S. Bank, was not willing to advance the funds needed to keep the hotel open while in default, he added.

The hotel is for sale, he said.

"We really felt like we had no choice," he said. "This is a really hard thing, especially for those employees here at Christmastime."

A Wyndham spokeswoman said the hotel chain "just recently became aware" of the owner's intent to close.

"The comfort and convenience of our customers is our primary concern, and we are diligently working through the details at this time in order to accommodate our guests and limit any inconvenience they may experience," Wyndham said in a statement.

Eulalia Rivera, a cook at the hotel for 23 years, said employees found out about the hotel closing Friday, in a letter with their paychecks.

"Everybody was crying," she said.

Rivera said she hopes the hotel will reopen but will be actively looking for another job.

"I'm not going to sit on my butt and do nothing. I'll go and look for something else," she said.

The closing of the Wyndham O'Hare was the latest hit to the Chicago area's hotel industry.

On Monday, the Sheraton Chicago Northwest and CoCo Key Water Resort in Arlington Heights announced it will close Monday.

The Sheraton-branded hotel is owned by WPH Arlington LLC, which said in a statement that the decision followed "many months of operational adjustments, significant negotiations and work with union leadership, negotiations relative to adjustments in real estate taxes and ongoing funding to maintain operations in hopes of some market recovery."

"Given the state of the economy in the Chicagoland market and the continued falloff of local business travel and corporate markets, it is not economically viable to continue with hotel operations," the company said.

The owners of the Intercontinental Hotel at O'Hare filed for bankruptcy protection in August amid about $155 million in debt. The court has given the owners until March to come up with a restructuring plan. In the meantime, the hotel has been allowed to conduct business as usual, according to court filings.

William Marks, a hotel industry analyst at JMP Securities, said hotel closings have been rare, as properties generally have managed to remain profitable.

"Despite the (economic) downturn, most hotels are running cash-flow positive," Marks said. A hotel would need to carry a large amount of debt for it to shut down, he added.

Chicago's hotel industry is heavily tied to the convention business, Marks said, which also could account for properties closing.


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