Union employees at downtown Hartford’s financially troubled Hilton Hotel have agreed on a new, four-year contract that freezes wages and other concessions to keep the doors open and preserve some 135 union jobs.
The agreement, lasting through 2014, was pivotal in helping the hotel at 315 Trumbull St. secure a financial-aid package from the city, which will assume ownership of the property 16 months from now.
HBJ Today reported Monday that the city council passed a resolution last week that includes providing the Hilton, owned by The Waterford Group in Connecticut, tax breaks and a new $7 million loan from the federal Department of Housing and Urban Development.
The proceeds of the 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 Hilton 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.
Ellen Thomson, chief negotiator of UNITE HERE Local 217, which represents about 135 waiters, waitresses, bartenders and housekeepers at the hotel, told HBJ Today the union approved the deal in January.
The contract contains an initial 18-month month wage freeze, but workers will be eligible for pay increases in six months.
Thomson said negotiations were “very difficult” and lasted for almost a year. The previous contract expired in February 2009.
Among the concessions, Thomson said the union agreed to raise eligibility requirements for insurance and pension benefits. To qualify for those perks union employees now must work 26 hours a week, instead of the previously required 24 hours.
The hotel will also guarantee a certain level of jobs with benefits for the life of contract, Thomson said.
About 80 to 90 union employees currently have health insurance coverage, Thomson said.
In addition, the hotel may outsource laundry services as long as it gives those employees the opportunity to work in other departments, or offers them a “significant” severance package, Thomson said.
Union members also agreed to an unpaid floating holiday for the first three years of the pact.
“The contract serves the most important rights and protections of workers, while working for some flexibility and cost savings for the employer,” Thomson said.
Waterford Group did not immediately respond for comment.
