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Hilton pulls its name from landmark Downtown hotel

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By Rick Stouffer
Friday, Sept. 3, 2010
 

More than 51 years after the name went on the new hotel at Commonwealth Place, Downtown, the Pittsburgh Hilton Hotel no longer is considered a Hilton property.

Hilton Hotels & Resorts of McLean, Va., on Thursday delivered a letter to the owner of the troubled hotel, Shubh Hotels Pittsburgh LLC, announcing it was terminating its franchise license agreement.

A Hilton spokesman, reading a prepared statement, said the franchise was pulled "due to violations of the franchise license agreement." He declined to elaborate.

Jai Lalwani, an associate of Shubh Hotels owner Atul Bisaria Boca Raton, Fla., in an e-mailed statement blamed the hotel's recently terminated manager, Fairfax, Va.-based Crescent Hotels & Resorts, for the franchise being pulled, saying "Crescent failed the scores -- and plotted with all."

He offered no further explanation. Bisaria could not be reached.

The action means the hotel technically no longer can carry the Hilton name. The property's listing has been eliminated from the Hilton website. What will become of the Hilton signs on the building is unclear.

Hilton Hotels & Resorts' statement said it expects Shubh to honor all existing reservations at the 713-room hotel, "and we will provide information updates as appropriate."

Yesterday, a long-expected change in ownership of the hotel was completed, according to a news release, with Tampa cardiologist and philanthropist Kiran Patel taking an 89 percent equity position under the name Black Diamond Hospitality LLC. Bisaria retains the remaining 11 percent share in the property.

"Constructive conversations are currently under way between Hilton Hotels & Resorts and Black Diamond," said the Hilton's asset manager, Frank Amedia, in a statement. "Hilton is the preferred brand, and the new ownership hopes to resume that relationship shortly."

Hilton Hotels officials couldn't be reached to comment on the new ownership, or whether conversations were initiated to return the Hilton brand to the hotel.

"It's hard for us to comment on the situation because we need further clarification from Hilton as to what the problems are at the property," said Megan Dardanell, spokeswoman for Allegheny County Executive Dan Onorato.

Dardanell said the Hilton brand is important to the county, and the county would do what it can to try and resolve the problems. She said there is no timetable for speaking with Hilton executives.

The loss of the Hilton cachet occurs less than two weeks after Shubh succeeded in ousting Crescent Hotels as manager, following lawsuits filed by both sides. The new property manager is Dallas-based Prism Hotels and Resorts, which took over Aug. 23.

Shubh accused Crescent of scheming with the property's mortgage holder, BlackRock Inc., the world's biggest asset manager, to take over the property. Crescent filed a countersuit for money it claims it is owed.

Crescent CEO Michael George, whose company began working at the hotel in March, said yesterday he was limited in what he could say because of lawsuits pending against Shubh and Bisaria.

"Our company still is owed 4 12 months of our management fee, an early termination fee and $450,000 loan made to Shubh Hotels and Bisaria which, in hindsight, was a calculated mistake," George said. In total, Shubh and Bisaria owe Crescent about $1.2 million, he said.

A guest at the Hilton who was in town for the game between the Steelers and Carolina Panthers said he saw little to indicate that the hotel no longer is a Hilton.

Brian Reichardt of Sinking Spring, Berks County, said he saw no "twitchy employees, like they were scared for their jobs." The only clue that something was different was that he couldn't find the hotel with his Global Positioning System device, he said.

The hotel and Shubh have been experiencing problems for more than two years. Work on an expansion and renovation, including the addition of a swimming pool, had been stalled at the steel framework stage for more than a year after then-construction manager P.J. Dick walked off the job for nonpayment of debts.

Millions of dollars in liens were leveled against Shubh and Bisaria by vendors and contractors for nonpayment of bills. A majority of the suits have been settled, but Dick's lien for more than $1 million remains in place. A hearing on the suit in Allegheny County Common Pleas Court is scheduled for Sept. 15.

Within the past month, work has resumed under Amedia, who is also managing construction, but the bare steel remains.

 

 
 


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