Friday, January 02, 2009

Washington Avenue Renaissance Hotel's Finances Deteriorate

From on December 19, 2008:
The Renaissance Hotel is experiencing even worse financial results than officials projected a month ago, general manager Robert Bray told bondholders recently. His comments are contained in a disclosure document filed this week by UMB Bank, the hotel’s bond trustee.

The hotel notified bondholders earlier that it wouldn’t be able to make an interest payment that was due Dec. 15. In fact, it is only paying $500,000 of the $3.5 million in interest that was due. Bray’s note says that the shortfall grew by $160,000 since November “as we saw group conference attendance deterioration and cancellations account for a decline of more than 1,300 room nights.”

Other gloomy numbers: The hotel will fall $2.6 million short of being able to make its June interest payment, which also is $3.5 million. That projection is $200,000 worse than what hotel officials reported a month ago. The Renaissance now expects occupancy to be 58.7 percent next year, down from the 60 percent figure in its earlier budget. And a capital fund for replacing furniture, fixtures and equipment is $9 million short of where it should be.

In other news from the filing, Steven Stogel is once again involved as an intermediary trying to find a permanent solution to the hotel’s financial problems. The St. Louis developer helped structure the original financing, and he worked on a restructuring for more than two years before bowing out this summer. At the time, it looked like the hotel’s developer, Historic Restoration Inc., was going to take full ownership and bring in new capital. Then the credit crunch and the worsening economy pushed the hotel to where it is now, in default.