The Trenton Times published the following article on June 10, 2013. To read the full article, click here.

Trenton Marriott officials vote to end $7,500 per month contract with financial management firm

By Jenna Pizzi/The Times of Trenton 
on June 10, 2013 at 9:21 PM, updated June 10, 2013 at 10:39 PM

TRENTON — In an effort to cut costs, the board that runs the city-owned hotel voted tonight to terminate its contract with the company that has handled the hotel’s money since it was built.

The Lafayette Yard Community Development Corp. unanimously voted to terminate the contract with Acquest Realty Advisors, a Michigan-based company which is paid $7,500 a month for its services. The Lafayette board has decided to manage the funds itself as it switches the general management of the hotel and attempts to find a new brand to replace Marriott.

The contract with Acquest was set to end in 2017, and the board’s decision to terminate it early drew protest from the management company.

David Ong, Acquest’s founder, said yesterday he was shocked to learn that the board was considering terminating the contract.

“You don’t just terminate a contract,” Ong said. “It is a two-way street.”

Ong said the board still owes Acquest $150,000 in late payments. He said the termination of the contract will also trigger “a boatload” of fees.

“There are a lot of deferred fees that are due upon termination,” Ong said.

Ong said he did not know exactly how much those fees would add up to, but said it was “much more than $150,000.”

“This is not the way to go into a very critical transitional process,” Ong said.

Board members decided they are entitled to terminate the contract at this juncture because the hotel is parting ways on Friday with a separate management company, Waterford, that is also involved with the hotel and also Marriott, whose brand will be removed from the hotel June 14.

“There appears to be an out clause,” said Joyce Kersey, the LYCDC chairwoman.

Board attorney Gregory Johnson said the termination provision in the contract with Acquest allows the board to terminate the contractual relationship when the contract with the hotel’s management company ends.

“I am confident now that the board acted within its rights under the agreement with Acquest,” Johnson said.

Kersey said the board felt that it was unnecessary to pay Acquest $7,500 per month, when the board can directly handle the affairs of the hotel more easily.

“It will help us rather than having to go through a third party,” she said. “We are not going through a franchise and business will be done quite differently.”

A lot has changed since Acquest and the board first signed their contract, Kersey said.

“A 15 year contract — it is just too long for anybody,” Kersey said. “You have to re-evaluate. We just don’t know how we would be able to afford it.”

Kersey said the board would be open to renegotiating a contract with Acquest that would reflect the current needs of the board, but she said it would have to be at a “much reduced rate.”

Also at their meeting yesterday, the LYCDC approved resolutions authorizing spending $5,355 to replace Marriott signage around the city and $17,500 for a property management system, the computer system the hotel needs to operate.

The Marriott signs will be taken down and replaced with signs advertising the hotel, which will now be called the Lafayette Yard Hotel and Conference Center.

Kersey said she and the board thought the new name “had a good bounce to it.”

Previously, the LYCDC signed a three-year contract with Marshall Hotels to manage the day-to-day operations after Waterford leaves this week, but negotiations have stalled in trying to bring on Wyndham as a new brand for the hotel. Kersey said Wyndham representatives have said they would need to know that the LYCDC has the $3 million needed for renovations to the hotel before the company would loan its name to the hotel.

A $3 million bond ordinance won preliminary approval from city council at a meeting last month, but has to be approved by the state Department of Community Affairs before it can be voted on by council for final approval.

Contact Jenna Pizzi at jpizzi@njtimes.com or (609) 989-5717.