By KENNETH R. GOSSELIN And JEFFREY B. COHEN | The Hartford Courant
November 05, 2008
There's one thing this fall's renovations at the Goodwin Hotel in downtown Hartford couldn't pretty up: finances awash in red ink.
The owner of the 124-room Goodwin — distinctive for its 19th-century, terra cotta facade — said Tuesday it will close downtown's only boutique hotel at the end of the year despite the recent upgrades. Long-running operating losses deepened by the industrywide downturn in the lodging business proved too steep.
Northland Investment Corp., downtown's largest property owner, said the Goodwin has had operating losses of more than $6 million since the company took over the hotel in 2005.
The closing — which could be reversed, Northland said, if the hotel's union takes over the business — would be a blow to downtown revitalization. With mixed success, efforts have aimed at bringing more stores, restaurants and lodgings to the central business district as it works to strengthen its convention business.
"Continuing down this path would jeopardize Northland's commitment to Hartford's revitalization," Northland spokesman Chuck Coursey said.
Northland is the developer of the Hartford 21 tower, which still has vacant retail on street levels. The developer also has been unable to get financing to build high-end condos on the site of the YMCA building on Bushnell Park.
Northland is willing to lease the hotel to UNITE HERE, Local 217 and its roughly 70 employees at the hotel for $1 a year to keep the hotel open, Coursey said.
Other hotel operators in downtown Hartford said they are also feeling the pinch of a downturn in a city that still struggles with a lack of event booking that will bring in visitors. "I don't think we've gotten to the level where it really needed to be," said Len Wolman, whose Waterford Group operates two downtown hotels — the Marriott next to the Connecticut Convention Center and the Hilton next to the XL Center.
"The potential is all still there. All the pieces are there," Wolman said. "They clearly need to be utilized more."
Hartford Mayor Eddie A. Perez and union officials said Tuesday they want to keep the hotel open.
"We're very interested in working with all parties in preserving these good union jobs and keeping this hotel open for the city," said Steve Matthews, a union official.
Perez said he hoped to fashion an agreement like the one that led to the saving of union jobs in the renovation of the Hilton in 2004.
Across the country, the economic downturn deepened by the meltdown on Wall Street and at some of the nation's largest banks has taken a harsh toll this fall on the lodging industry.
Smedes Rose, a lodging analyst at Keefe, Bruyette & Woods Inc. in New York, said companies have slashed travel budgets and leisure travelers pulled back when gasoline prices soared above $4 a gallon. Even though gas prices have fallen back, consumers remain cautious, he said.
"Now, whether we are or not, people feel like we're in a recession," Rose said. "And they aren't going to pony up to stay in a hotel right now."
The industry's troubles began to hit Hartford-area hotels in late summer. Occupancy fell 7.5 percent in August and 9.1 percent in September, pushing the Hartford area's hotel occupancy to 55 percent, according to Smith Travel Research. That helped erode gains in recent years that had consistently pushed occupancy into the low and mid-60s.
The closing of the 124-room hotel at Asylum and Haynes streets will not affect the businesses in Goodwin Square's office tower, and all deposits for hotel and function reservations for 2008 will be honored, Coursey said.
Developer Larry Gottesdiener's Northland Investment Corp. bought the hotel and office tower from the state's pension fund in the summer of 2005 for $41 million. After reaching a labor agreement in 2006, Gottesdiener announced an upgrade to the hotel that would run between $5 million and $10 million. Part of that upgrade has been completed.
Reprinted with permission of the Hartford Courant.
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