Oddball: Why don’t you knock it off with them negative waves? Why don’t you dig how beautiful it is out here? Why don’t you say something righteous and hopeful for a change?
Moriarty: Crap! – from “Kelly’s Heroes” (1970)
OK, like remember last year when Trenton City Council gave the Lafayette Yard Community Development Corporation (LYCDC) $500,000 in emergency funding to tide the city-owned Marriott Hotel over through another difficult year of business, refinance outstanding bonds and provide a cushion of operating cash? Remember? City Council said to the Hotel’s Board, “Here’s some of the money now. The rest we’ll give you later if you need it. But be sure to keep us informed on how things are going with the hotel! After all, the public owns it and has a big investment in the place. A lot of money that taxpayers are on the hook for if you fail. Keep in touch! Keep us informed!”
Well, between January 2012 and last night, when the LYCDC Board presented City Council with another cash call (this time only for $295,000; I lost the pool, guessing another $500K ask was in store), there wasn’t much communication from the Board. More like none.
According to an account this morning by Brian Dzenis in The Trentonian, “Last year, the groups received a cash call of $500,000 from the city. The deal was that they received $385,000 up front and the groups would receive the rest if the LYCDC chairman gave regular updates on the hotel to council. This did not happen and the money was never handed out, yet the hotel groups want that money.”
Why were there no updates given to Council by the LYCDC Board? Too many negative waves, man!!
“’We wanted to find positive information to give,’ [LYCDC Board Chair] Cleve Christie said regarding the lack of communication. ‘Council is inundated with enough negativity.’” – NOT from “Kelly’s Heroes” (1970)
In other words, all the numbers coming out of the hotel were losses or much lower than projections. Expenses up, occupancy down, zero marketing efforts, pretty much a total bummer. Why tell Council all that and harsh their mellow?
But, you know, this is the kind of thing that Council, and the public need to hear! And need to hear as it happens, on a timely basis. It is absolutely appalling that the LYCDC Board chose not to disclose this information to City Council.
Council members felt the same. “You’re supposed to give information that you have, not what you want to give,” said Council President Phyllis Holly-Ward. Councilman Zachary Chester concurred, as quoted in The Times account by Erin Duffy. “The hotel has been silent on everything other than when it comes to council and it needs money. Fool me once, you know?”
Yeah. We know!
Council also wanted to hear why the marketing for the hotel has been so poor, and why Trenton’s hotel has consistently failed to attract much business from outside the city. The president of the outgoing management firm Waterford Hotel Group, Robert Winchester, was asked about this. According to the Trentonian, “When the Waterford representative was asked about the hotel’s marketing plan, he stumbled with a general response about Marriott as an overall company before stating ‘it’s pretty detailed.’”
And that brilliant response came from the president of the company. It’s no wonder that the paper next states, “The comment drew audible laughter in council chambers.”
All kidding aside, the message delivered to Council last night was nothing but grim. Although the Members will not examine and discuss the pending deal to re-brand the hotel as a Wyndham Hotel for the future until March 7, they were told that the work and expense to upgrade the hotel to Wyndham standards would be significant. City Business Administrator Sam Hutchinson told Council, “There are big, big, big dollars that are going to be required. This cash call is probably $300,000. It’s probably 10 times that amount that’s going to be required.”
That’s an estimate of $3,000,000. Three Million Dollars for a hotel that has never made an operating profit, that has never covered the cost of its outstanding debt, and that continues to demand more and more taxpayer dollars to keep its doors open. For what?
“The hope is that the hotel will generate a profit with a new company,” LYCDC Chair Christie said last night. That is a hope that looks to be awfully thin based on the last dozen years of history.
A few things are clear from last night. First, Mr. Christie should be fired. Immediately. He has concealed the financial condition of the hotel from Council. He has undertaken the transition process to a new brand and management company in secret, without following state and city purchasing law and processes. Any other of his colleagues who worked with him on this should also go. Now.
Not one more dime should be paid by City taxpayers for the operation of this hotel. Certainly not to a hotel management that will be gone in a few months. And not for an operation that will demand a further investment of several million dollars to keep it under a new brand, with nothing more than a “hope” that the place will turn a profit.
The hotel has been a money pit. Apart from $14 Million still outstanding in city-guaranteed bonds, which the hotel cannot pay, $1 Million in state Urban Enterprise Zone went to Lafayette Yard, intended for capital improvements; but $225,000 was diverted to cover operations. An earlier City Business Administrator, the infamous Dennis Gonzalez, wrote a $500,000 City check to the hotel under Mayor Doug Palmer’s Adminstration, without Council approval. Add last year’s cash call, last night’s and the prospect of $3 Million – or more, who knows? – of renovations.
Where might it all end?
No one knows how much more this place might suck from the taxpayers. After last night’s outrageous performance from Mr. Christie and Mr. Winchester, I know When It Should End. Now.
In January of last year, at the time of the last cash call, Chairman Christie made a prediction. “If we do our due diligence as we’re doing now and monitor things and make sure that budgets are met and things like that, it’s a given that we’ll finish in the black.”
Well, the hotel has NOT “finished in the black.” He did NOT do due diligence “and things like that.”
The hotel has failed.
It’s time to pull the plug.
I know, I know. What can I say?