The Trenton Times published the following article on May 7, 2013. To read the full article, click here.

Department of Community Affairs holds off on giving Trenton Marriott $200K

By Erin Duffy/The Times of Trenton 
on May 07, 2013 at 9:37 PM, updated May 07, 2013 at 11:24 PM

TRENTON — The word came down from high tonight: More money for the city-owned hotel is a no-go.

The state Department of Community Affairs (DCA) told the city tonight it will not sign off on any more cash infusions for the West Lafayette Street Marriott hotel until the state sees a concrete plan to fund an estimated $3 million transition to new management and renovation and real evidence that the hotel’s flagging fortunes can be turned around.

The revelation came as the Lafayette Yard Community Development Corp., the public body that oversees the hotel, came before council to request another $200,000 from the city to pay for a new computer reservation system and other costs associated with the hotel’s transition to a new management company and franchise come June 15.

“We received notification from DCA earlier today that they will not even consider any funding in support of the hotel until they receive a copy of a plan from the city with respect to available options for funding and profits — a more comprehensive plan,” business administrator Sam Hutchinson said.

The DCA retains oversight over some aspects of the city’s spending as a condition of the millions the city receives each year in state transitional aid and must approve certain contracts before they head over to council for a vote. The city approved a $295,000 cash call to pay off outstanding bills at the hotel in March and last year authorized another $500,000 to keep the hotel going through the slow winter months.

After Hutchinson’s announcement, Councilman Zachary Chester requested the $200,000 hotel resolution on council’s docket be pulled. Council members voiced no objections and council will not vote on the funding request at tomorrow’s meeting.

“Based on the information Mr. Hutchinson just provided us, even if we approved this, DCA did not approve it and will not approve it,” Chester said. “As a matter of fact, it will have to be pulled, because it needs DCA’s approval before it comes to council.”

Council members asked Hutchinson if the administration or Mayor Tony Mack wanted to pull the funding request.

Hutchinson responded that Mack had put it on the council docket for consideration. “I can respectfully request that the mayor withdraw it, but the mayor is the sitting official above me.”

A sarcastic Councilwoman Kathy McBride said the state had completed its takeover of Trenton with its latest spending edict.

“There are certain things I think the community is not clear on,” she said. The state ruling proves that DCA Division of Local Government Services Director Tom Neff is essentially running the town, not Mack, she said. “There is no other way to view this, that Mayor Tony F. Mack is just a figurehead. Tom Neff is the mayor of the city of Trenton and that is the bottom line,” she said.

The DCA decision to cut off city funding comes as the hotel faces a June 14 deadline to transition from a Marriott to a Wyndham hotel and as the hotel board signed a three-year contract on Friday with new management company Marshall Hotels & Resorts.

Hotel asset manager David Ong of Acquest Realty Advisors, hotel board chairwoman Joyce Kersey, LYCDC attorney Gregory Johnson and Michael Getzey, Marshall’s president of construction, left quickly after council pulled the hotel resolution without indicating what action they might take in response to the funding rejection.

Current brand Marriott and manager Waterford Hotel Group have both declined to extend their affiliation with the hotel, leaving the hotel board scrambling this past year to keep the hotel open and find a new flag.

At the beginning of the meeting, Kersey and Ong both asked council for one more chance to turn the failing hotel around. Without the $200,000 in transition costs, without the $3 million Wyndham has estimated it needs for a property makeover, the hotel will close, Ong has said.

“Where we are today is an attempt at survival,” Ong said.

Several council members and residents remained unmoved — cut the city’s losses and sell the hotel, they said.

“The hotel has to go,” resident Patricia Stewart said. “Yes, we’re going to lose a lot of money. It was a bad deal from the very beginning and hopefully we’ve learned something. An education is not cheap.”

“If we fund the transition then you’re going to come back and say we need $3 million to make all the changes,” Chester said. “I haven’t seen anything that’s going to guarantee that this hotel is going to become profitable. I haven’t seen it. Those are projections, but there’s nothing saying this is going to happen. So I cannot and I will not support the taxpayer dollars for the transition.”

Ong estimated the hotel, built for $60 million in 2002, would only fetch $3 million if sold today. About $30 million in debt service remains attached to the hotel, including $14 million the city continues to pay down.

Ong said few offers to buy the hotel, including a recent declaration of interest from Shelly Zeiger, one of the developers who helped pave the way for the Marriott, could be considered credible. Still, Hutchinson said he was still open to meeting with any and all prospective buyers and had already scheduled a meeting with Zeiger for Friday.
Hutchinson cautioned council to exercise caution when it came to authorizing more money to the hotel.

“Let us not be misled by what could be simply because we’re getting projections,” he said. “We had projections 13 years ago. We have to be very, very careful with what we’re signing on to.”