Renaissance owners look at selling suites - St. Louis Business Journal:

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Bondholders on the $277 million hotel locatex in the 800 block of Washington Avenue downtown aftefr its previous owners defaulted on making an interest payment onits $98 million debt load. The the largest in St. Louis, was foreclosed on in and the sole bid for the hotek was made bythe bondholders’ trustee, , for $98 million, the amountt of debt on the property. The hotel openerd in 2003, but has failed to make revenue projections. Its former owner, Gatewauy Hotel Partners, defaulted on a $3.5 milliohn interest payment due Dec. 15. Gatewagy Hotel Partners is comprised of Housing a subsidiaryof Dallas-based and New Orleans-based .
, a consultant hiredf to advise the owners of the Renaissance on strategies to cut costs andboost profitability, has begun talka with Marriott, the hotel’s manager, about the feasibility of selling the formerr Lennox Building, which is locatede on the north side of Washington immediately adjacent to the conventionj complex. “(The Suites building) is situated across a city Washington Avenue, from the primary hotel property and can be independen and self sustaining without any physical ties to the according to a Jones Lang LaSalledHotels report, which was presented to bondholders April 30, according to a transcriptt of the bondholders’ call.
Brucee Stemerman, managing director of Jonew Lang LaSalle Hotels reported that first quarter 2009 revenue and operating income at the Renaissancreoutperformed Marriott’s budget by $123,000 and $156,000o respectively, but also noted that revenuew per available room was down 12.9 percent in the first quarter compared to 2008. “The remainde of 2009 is not expecte d to be as favorablee as the first quarter as a result of weak grou bookings and lowtransient demand,” according to the “For the entire year, revenues are expected to fall $10 milliobn and $15 million from the 2009 budget and 2008 respectively.
” The bondholders are considering sellintg the Renaissance to a successor owner. According to the conferencw call transcript, Marriott is seekinv to temporarily suspend retirement benefi t contributions for hotel employees and postpone two wage increasess for hotel employeesin 2009, whic would total about $200,0000. Unite Here, the union that representds hourly workers atthe Renaissance, has proposede that in exchange for foregoing retirementg benefits and wage increases, a collectivew bargaining agreement be recognized by a successor owner.