The city of Hartford has reached agreement on a financial-aid package to keep downtown’s ailing Hilton Hotel from closing and preserve 140 jobs.
The city council passed a resolution last month that includes providing the hotel, owned by The Waterford Group in Waterford, tax breaks and a new $7 million loan from the federal Department of Housing and Urban Development.
The proceeds of HUD loan are being paid to GE Business Financial Services Inc. in exchange for release of its $22 million mortgage on the property.
As part of the deal, the city will also convert the current air lease on the property to a ground lease on July 1, 2011. As a result, the hotel will not be subject to real property taxes, but will instead pay a base rent.
According to the Feb. 22 resolution, the Hilton would have been forced to close without the aid.
“Currently the Hartford Hilton is not a viable business enterprise,” the resolution said. “Absent a dramatic restructure of financing, air lease and collective bargain agreement, the Hotel will in all likelihood be forced to close,” leading to the loss of 140 jobs.
Hartford lawyer Frank Appicelli, who has been representing the Waterford Group, said they are still in the process of finalizing the deal, which will likely be completed in the three to fourth months, after the HUD loan is approved.
He said all parties involved, including the hotel owners, city, GE and the union have been negotiating the financial package for months and that all of them are “committed to moving forward.”
City Chief Operating officer David Panagore told HBJ Today the deal will preserve 140 jobs in Hartford, while also saving one of the downtown’s two Call A hotels.
Meanwhile, City Councilman Matthew Ritter said saving the hotel was necessary to maintain downtown as a destination for business travelers and tourists.
“It’s very important for us given the loss of Goodwin Hotel,” Ritter said. “The city needs to maintain enough hotel rooms to host big conventions and meetings.”
The financial incentives package also includes:
·      Release of all existing liens on the Hartford Hilton;
·      Payment of all past due taxes;
·      Restore the parking agreement between the hotel and Hartford Parking Authority, reducing the amount of spaces the hotel is required to lease in the adjacent garage;
·      Confirmation that the hotel’s franchise relationship with Hilton Worldwide is in good standig;
·      Execution of a new collective barraging agreement between the hotel and its union employees;
·      Signing a job retention agreement between the city and hotel.
