Waterford Group may have an easier time finding a buyer for its pandemic-battered Hartford Hilton hotel, as Mayor Luke Bronin has received the city council’s blessing to restructure a lease and tax agreement with the Trumbull Street hotel.
Councilors voted unanimously Monday evening to authorize Bronin to extend by 49 years the ground lease on the city-owned property on which the 388-room hotel sits and enter into an agreement that would substitute the hotel’s current payment in lieu of taxes, with an annual payment based on how much revenue the hotel brings in.
Waterford said recently that it intended to market the hotel for sale, citing the financial effects of COVID-19. The hotel laid off about 300 people in July.
Waterford’s PILOT payment totaled more than $522,000 in fiscal year 2018, according to city budget documents. It’s unclear exactly how much a new owner of the hotel would save under the proposed restructuring, which includes payments equal to 3% of revenues in the first five years, which gradually escalates over time, reaching 4.5% of revenues in the 21st year, according to a term sheet.
There would be no PILOT payment in the first five years, but the payments would be phased in starting in the sixth year, at a minimum of $550,000, which would grow to $650,000 in the 11th year.
The city had originally proposed that a new owner would be required to assume the existing collective bargaining agreement of United Here union workers who staff the hotel.
However, a last-minute change less than two hours before Monday’s meeting saw that provision replaced with a requirement that a new owner enter into a so-called “labor peace agreement” with the hotel’s workforce.
Such an agreement would presumably mean the Hilton remains a union shop, but it wasn’t immediately clear how much financial benefit the change might present for a new owner.
Waterford did not immediately respond to a request for comment Tuesday morning. There was little discussion of the labor peace agreement during the council meeting.
Councilwoman Wildaliz Bermudez, a member of the Working Families Party, said the party spoke with United Here employees of the Hilton, many of whom live in the city.
“We certainly don’t want anyone to lose their jobs,” said Bermudez, noting that more than 137 people work at the hotel. “Employees there want to have a good living wage and continue being union members and working at the hotel.”
