The Trenton Times published the following article on March 8, 2013. To read the full article, click here.

Trenton City Council agrees to give Marriott $295K

By Erin Duffy/The Times of Trenton 
on March 08, 2013 at 7:00 AM, updated March 08, 2013 at 7:20 AM

TRENTON — Wavering between cutting the city’s losses when it comes to the money-losing Trenton Marriott and forking over more dollars to prevent the imminent closure of the city-owned hotel, city council voted 4-3 last night to approve a $295,000 cash call that should keep the struggling hotel open through at least June.

“The past week I’ve been talking about this situation with all the downtown businesses and they have urged me to do whatever I can as a council member because they don’t want the Marriott to close,” said Councilwoman Marge Caldwell-Wilson, who voted for the cash call, with reservations. “I don’t want it to close either, but I’m not happy with the road it’s going down. But I understand we have to pay bills and I can’t see shutting the doors tonight and telling all those (employees) they have to find places to go.”

Others, notably Council President Phyllis Holly-Ward, said the city could no longer continue to subsidize a failing hotel and should close the building, wait for a buyer and sell it. Last month, the public board that oversees the Marriott chose Wyndham Hotels and Resorts to replace Marriott later this year, but no deal has been finalized and the council has insisted on making the final decision on the hotel’s future.

“I don’t want to continue to on this merry-go-round,” Holly-Ward said. “We shouldn’t be in the hotel business.”

After huddling in executive session for more than 40 minutes, Holly-Ward, Councilmen Zachary Chester and George Muschal voted against the funding request and Caldwell-Wilson, Councilman Alex Bethea and Councilwomen Verlina Reynolds-Jackson and Kathy McBride voted in favor of it.

“Obviously we’re between a rock and a hard place,” Bethea said earlier in the night. “We’ll have to do this or the lights are going off.”

Throughout the meeting, council was once again urged to fund the cash call request made two weeks ago by Waterford Hotel Group, the Connecticut company that manages the hotel, by both business administrator Sam Hutchinson and Rocky Peterson, the attorney representing the Lafayette Yard Community Development Corp., the public board that oversees the Marriott. As part of its contract, Waterford reserves the right to request extra cash from the city if the hotel’s cash reserve dips below $200,000.

Both Peterson and Hutchinson said the situation was dire: Waterford must receive the money by 11:59 p.m. on March 15 or the hotel will close. Waterford will pull out, Marriott will yank its brand and support system and all staff will be laid off.

Several council members asked Peterson to inquire about an extension on the cash call, saying they wanted to see the current LYCDC board dissolved and a new board brought on before authorizing another penny for the hotel. Just hours before the meeting, board chairman Cleve Christie resigned amid complaints he received preferential treatment from hotel management for jazz concerts he booked at the Marriott.

“You’re bringing this to city council at the 11th hour,” Holly-Ward said. “You’re pushing our back against the wall and telling us we have no alternative. A new board would make a big difference for me.”

Hutchinson said a decision on the cash call had to come now.

“We need to get past this $295,000,” Hutchinson said. “We’re going to pay $295,000 whether council does it by vote or we get dragged into court and we lose. And we will lose. If Waterford goes, Marriott pulls its flag and it’s just that plain and simple. And when they pull that flag we’re not simply talking about taking the name from the hotel. We’re talking about shutting down systems, shutting down communications, no way for reservations.”

And $295,000 is just a small piece of the pie when it comes to expenses for the hotel, Hutchinson said. In addition to the cash call, it’s likely the city will still be on the hook for another $2.5 to $3 million to finance the renovation necessary to transition the hotel from a Marriott to a Wyndham. The hotel’s contracts with Marriott and Waterford both end in June, and the LYCDC board has selected Wyndham and new manager Marshall Hotels & Resorts to take over once the two groups depart.

“It’s at least clear to me that if council should approve the $295,000 that’s not approval of a new management company or any new flag,” Hutchinson said. “That’s yet to be determined.”

While council members bickered occasionally on whether or not to hand over more money to the Marriott — the city has now paid $1.295 million in cash calls or to cover hotel debt since 2010, in addition to $1.4 million in annual debt service — they also seemed to agree that serious discussions need to be had about the future of the hotel and its board — and soon.

Though Christie admitted no wrong-doing yesterday and said he was resigning so his presence wouldn’t be a distraction or reason for council to reject the cash call, Chester and Caldwell-Wilson pointed out that none of the board’s members had been approved by council, as outlined in the LYCDC’s bylaws, and that the board had operated for too long under a veil of secrecy.

“There’s a lot of mistrust here, dealing with this organization,” Caldwell-Wilson said.

Hutchinson said the city was busy exploring all its options in regards to the hotel, from supporting the transition to a Wyndham to trying to sell the property and pay down some of the city’s remaining $14 million bond debt. The city had already heard from one interested buyer that Hutchinson said he was going to talk to today. There’s also an upcoming meeting with the state to discuss having the state and/or county share some financial responsibility for the hotel.

“There’s one hotel in the capital city of New Jersey,” he said. “I don’t think we alone should bear the burden if there’s a transition to a new flag.”