UNITE HERE, Steps Up Boycott Against Hotels Owned by Columbia Sussex
WASHINGTON, DC - March 26, 2010 - Hotel company Columbia Sussex faces a “perfect storm” of its own making - high leverage, buying at or near the peak of real estate prices and cmbs loan securitization, a depressed hotel market, and fed up hotel workers - as they soon have to refinance the $1 billion in loans for 14 hotels acquired in late 2005, according to hotel union UNITE HERE.
At rallies around the country today, hotel workers are calling on customers to boycott 8 hotels owned by Columbia Sussex, announced UNITE HERE. Hotel workers told Columbia Sussex Corporation that they are tired of paying for the company's debt and want a fair process to organize a union.
In the past few years, hotel workers at 4 unionized hotels owned and operated by Columbia Sussex - Baltimore Sheraton City Center in Maryland, Hilton Crystal City in Northern Virginia, Anchorage Hilton in Alaska and Hilton Sacramento West in California - have faced a variety of cuts, including layoffs, benefit reductions, pay freezes, higher costs for health insurance, and/or work speed-ups in the wake of their hotel's acquisition by Columbia Sussex. These four hotels are already subject to boycotts, and today, UNITE HERE is calling on customers to boycott 4 additional non-union, Columbia Sussex hotels in support of its call for a fair process for workers at these hotels to decide whether or not to unionize. They are: Westin Washington DC City Center, Westin Emerald Plaza San Diego, Wyndham Chicago and Westin Chicago Northwest.
Mary Lee Hinant, a Baltimore Sheraton laundry worker for 34 years, said: “Ever since banks lent all that money to Columbia Sussex to buy my hotel, my paycheck is smaller, I don't qualify for health insurance anymore, and my co-workers are laid off.”
Columbia Sussex is the fourth largest owner of full service hotels in the U.S., building its 67-hotel empire during the boom years by borrowing heavily to buy hotels. 5 of the 8 boycotted hotels were acquired by Columbia Sussex in 2005 in a package of 14 hotels, where 79% of the purchase price was borrowed. The $1.1 billion of debt supported by these 14 hotels comes due in October 2010 and - as for many of the hotel loans issued at the height of the real estate market - the future is uncertain. The senior notes for this debt comprise most of the Bear Stearns 2006-BBA7 CMBS, and account for 93% of the outstanding balance.
Fitch downgraded two CDOs Guggenheim 2005-1 and Brascan 2005-2, which contain mezzanine debt for this 14-hotel portfolio, modeling losses for classes containing Columbia Sussex's debt.
“Since Columbia Sussex bought the hotel several years ago, staffing has been cut. Columbia Sussex reduced our wages by 3% across the board and stopped paying the match on our 401Ks,” said Laurence Green, a 24-year cook at the Westin Washington DC City Center.
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