The Trenton Times published the following article on June 12, 2013. To read the full article, click here.
Consulting group wants to solve Trenton Marriott’s financial problems
By Jenna Pizzi/The Times of Trenton
on June 12, 2013 at 7:10 PM, updated June 12, 2013 at 7:19 PMTRENTON — A consulting company headed by the former director of the Trenton Downtown Association plans to make pitch to reorganize the finances of the city’s debt-burdened downtown hotel and put it on stronger footing.
LMCK Partners, headed by former TDA head and city economic development director Taneshia Nash Laird, learned about the hotel’s financial woes and approached the Lafayette Yard Community Development Corp. for the opportunity to make a proposal.
The hotel has nearly $30 million in debt, including $13.3 million in city-backed bonds and loans from the state, the state Economic Development Authority (EDA) and the Trenton Parking Authority. It will lose its affiliation with the Marriott brand this week and is seeking $3 million from a skeptical city council to fund upgrades and conversion to a Wyndham-branded hotel.
“Our goal is to basically put them in a position as much as we can to basically solve the situation,” said Bill Klun, an LMCK partner who specializes in financial restructuring. He has overseen several corporate restructurings and serves on the EDA’s energy technology investment committee, according to LMCK.
Klun argued that his firm is well-suited to take on the unusual and complex situation of the hotel’s finances because of the partners’ expertise.
“In my opinion, it’s a situation where you have to go with a fresh pair of eyes because there aren’t going to be many restructuring people who know how to do this,” Klun said.
LMCK was founded a year and a half ago by Klun, Stephen Marks, Christopher Conway and Laird’s late husband, former Trenton council candidate Roland Laird. Conway, Marks and Laird attended Brown University together and Marks knew Klun from the Wharton School at the University of Pennsylvania. Taneshia Nash Laird took over as CEO when her husband passed away earlier this year.
Laird said LMCK has not completed any projects but is working to secure consulting contracts in New Jersey, North Carolina and Los Angeles, Calif. Laird said the partners have contracted with one client and are waiting for the project to begin. She declined to identify the client or describe the project.
Klun said LMCK is working with the hotel board’s attorney to get financial information about the facility so the partners can make a proposal next month. He said that, based on preliminary information, he thinks the board should reorganize its debt to avoid formal bankruptcy. The hotel is not technically bankrupt but is clearly in “financial distress,” he said.
“You are either in a position to pay your bills or you are not,” he said. “Right now they are not and as a result they are relying on the support of the city.”
After they make the proposal Klun and Laird will present terms for a consulting contract with the board, he said.
In a related development, board member Michael McGrath said yesterday that he will step down after serving for two and a half years. He cited as his reasons the hotel transition and the state Department of Community Affairs’ move to vet and possibly replace the board members.
McGrath said during his time on the board he pushed to increase transparency and provide the public with information about the LYCDC.
Contact Jenna Pizzi at jpizzi@njtimes.com or (609) 989-5717.