The Trenton Times published the following article on June 2, 2013. To read the full article, click here.

‘It never really reached its potential’: Trenton officials lament struggles of downtown hotel

By Jenna Pizzi/The Times of Trenton 
on June 02, 2013 at 7:30 AM, updated June 02, 2013 at 7:32 AM

TRENTON — Thirteen years ago, a smiling Mayor Douglas Palmer stood triumphantly atop a makeshift stage near the Trenton War memorial. After years struggling to secure financing, his dream to bring a full-service hotel to Trenton would soon become a reality.

He placed a shiny shovel into a pile of dirt at the ceremonial groundbreaking for the property that would in two years open to the public as The Trenton Marriott at Lafayette Yard.

“It is symbolic. For this is the breaking of a new day, with new ideas and new hopes and plans for downtown Trenton. This hotel must become not the end result of our efforts, but the catalyst that ignites a new beginning,” Palmer said at the May 30, 2000 ceremony.

But today as the former mayor looks back, his hopes for a new beginning are unfulfilled and the city is left with a hotel struggling to support nearly $30 million in debt while barely turning a profit.

“I am disappointed,” Palmer said last week.

The city council is poised to decide the future of the hotel when it votes on a $3 million ordinance that would fund renovations and for the hotel’s transition to take on a new name.

While the funding won preliminary approval by a slim margin of 4-3 last month, the ordinance needs one more vote for final passage.

If the funding to renovate the hotel for rebranding as a Wyndham is not approved, city officials have discussed the possibilities of continuing hotel operations without a brand name attached.

It was supposed to be one of the high hopes of bringing Trenton back, bringing people back to town for business and tourism

But members of the Lafayette Yard Community Development Corp., the public board that oversees the hotel for the city, have said the hotel will be more profitable and enticing to a potential buyer if it has a brand flag. The board recently signed a contract with Marshall Hotels to manage operations, taking over from Waterford Hotel Group, when they leave with Marriott on June 15.

Joyce Kersey, the board chairwoman, said Wyndham would not sign on to the Trenton hotel if the funding to fix up the 11-year-old hotel isn’t secured.

Palmer said he hopes that the council votes in favor of the $3 million ordinance, because he does not want to see the building go dark.

“It took a lot to get that hotel here and it is not as easy to just turn off the lights,” Palmer said.

Members of city council, Mayor Tony Mack, representatives from the state Department of Community Affairs, which oversees city spending, and the board have said the end goal is to sell the hotel and get the city out of the hotel business.

But it is not as simple of putting a “for sale” sign out front, said the city’s bond counsel Ed McManimon.

The city would have to pay the existing loans — $5 million from the state, $2.7 million owed to the state’s Economic Development Agency, and $7.3 million to the Trenton Parking Authority — before it could acquire the title for the hotel.

“You essentially have to acquire it by paying off the bonds,” he said. But McManimon said he thinks it is possible that the state would forgive the hotel debt, because the chances of being repaid are slim if the hotel continues to have the same profits it has in recent years.

The city also continues to pay off the remaining $13.3 million in bonds it backed for the hotel’s construction, McManimon said.

When the plan for the hotel was hatched it wasn’t meant to become a burden on the taxpayers.

“We were working to have the bonds sold so that the city would have nothing to do with it. No city money,” Palmer said.

But around 2000, Palmer and other project champions started losing potential investors, he said.

Palmer remembers one day when the city’s business administrator came to him saying there wasn’t enough money to build the hotel.

“He said to me ‘The numbers don’t work,’” Palmer said. “He said the only way to do it is if the city guarantee’s the bonds.”

While the new plan put the city at risk if it failed, city council supported it, Palmer said.
He said the state financing initially was supposed to be a $5 million grant to the city, but after a meeting with state officials, the grant turned into a zero-interest loan.

Palmer said the closed-door decision was made because of “political issues.” Some members of the Legislature were reluctant to back the hotel unless the city took on more financial responsibility.

“It was supposed to be one of the high hopes of bringing Trenton back, bringing people back to town for business and tourism,” said Robert Prunetti, who was Mercer County executive at the time and is currently the executive director of the MID Jersey Chamber of Commerce.

“Unfortunately it ran into some hard times,” said Bill Watson, who was a member of the board from its inception until last year.

Watson said after the terrorist attacks of Sept. 11, 2001, the region and the hotel business took a hit and when the Marriott opened it struggled.

In its first year, the hotel had $5 million in revenues with a net loss of $676,864, but from 2003 to 2005 the hotel saw revenues reach $10 million and in 2004 it made a net profit of $322,265, according to information from former board chairman Cleve Christie. In 2006 and 2007 the hotel was profitable, but in 2009, as the economy began to suffer, the hotel had a $1 million loss, Christie said.

“It never really reached its potential,” Watson said.

Palmer said that the state never followed through on bringing conventions and business to the hotel.

“The state was supposed to have all their conferences come to Trenton,” he said. “The hotel was for the state’s use more than anything.”

Now, the hotel is still struggling and it never lived up to the promises to make Trenton the destination that it was built to accommodate.