The Hilton Anchorage has been combatting persistent mold and conditions conducive to mold growth at the hotel since at least 2014.
On 6/08/2016 a Columbia Sportswear representative reported to Anchorage police that $10k worth of merchandise was stolen out of a locked conference room. Read more.
July 26, 2016
NEW YORK—UNITE HERE released its second report today for prospective lenders who might consider refinancing the debt of the Columbia Sussex Corporation (CSC)-owned Hilton Anchorage Hotel, which matures in March 2017. The report provides lenders with information about conditions at the hotel, as well as recent developments around debt at other properties in the CSC portfolio. It details that:
- The Hilton Anchorage has been combatting persistent mold and conditions conducive to mold growth at the hotel since 2014. On April 1, 2016, a leak sprung from around a light fixture in the hotel’s lobby causing water to spill down onto the lobby floor, and the hotel reported repairing water damage in some rooms as a result of a January 2016 earthquake that struck the Anchorage area. The hotel also has asbestos and lead in various building material found throughout the hotel that must be taken into account whenever construction work is performed.
- CSC sold what had previously been the Marriott Hotel and Convention Center in Oklahoma City to its lender Wells Fargo at a sheriff’s sale in December 2015, after Wells Fargo initiated a foreclosure action against the property in Oklahoma state court in 2012. In December 2014, the court-appointed receiver reported that mold was prevalent at the hotel, and Wells Fargo amended its lawsuit in May 2015 to seek damages for alleged remediation costs. A decree of foreclosure was entered in October 2015.
- The CSC-owned Marriott Phoenix Airport loan was reported to have been transferred to special servicing on 9/3/15 due to what was described as “imminent default.” The loan had a 6/1/2016 maturity date and a balance of around $61 million. On 7/5/2016, it was reported that the loan was not paid off at its June maturity date and foreclosure is being pursued.
- A number of CSC loans were recently on a Watch List and being monitored by special servicers. One of these hotels, the DoubleTree Orlando Airport was acquired in June 2016 by GF Management which reportedly plans to “undertake over $8 million worth of renovations.”
- In 2012 CSC lost the Richmond Marriott West in Richmond, VA. CSC had purchased the property in 2005, but by November 2012 CSC had stopped making its loan payments. The property had reportedly not been refurbished since it opened in 2001.
Potential lenders will find the report useful in assessing whether to refinance the Hilton Anchorage’s debt, particularly in light of what may become a challenging financial environment for the hotel industry.
UNITE HERE is a labor union that represents 270,000 working people across Canada and the United States. Its members work in the hotel, gaming, food service, manufacturing, textile, distribution, laundry, transportation, and airport industries. UNITE HERE Local 878 represents workers at the Hilton Anchorage where there is currently an active labor dispute.
This report provides information on debt issues at certain Columbia Sussex Corporation properties; updates on mold, lead and asbestos identified at the Hilton Anchorage property; and information on damage caused by the January 2016 earthquake that struck the Anchorage area.
Dear Hilton Anchorage Customer:
We have previously contacted you about the Anchorage Hilton’s efforts to combat mold at the hotel. Now we are contacting you about asbestos and lead…
On September 8, 2015, a lawsuit was filed against CSC and two other defendants over an elevator incident that occurred at the Hilton Anchorage in September 2013. The plaintiff alleges that, while attending an event at the hotel, she suffered various injuries after the elevator descended abruptly and she was trapped. In answering the plaintiff’s allegations, CSC wrote that it “admits that while she was riding the elevator it stopped before arriving at her intended destination and the doors did not open,” but the company “denies that the elevator ‘plunged’ from the 14th floor to the 5th floor or that the elevator experienced a ‘free fall’ or anything of that sort.” The case remains in litigation.
 Roberta Urena v. Schindler Elevator Corporation, Columbia Sussex, Otis Elevator Company, (U.S. District Court for the District of Alaska Case Number 3:15-cv-00223-RRB, complaint filed 09/08/15).
 Roberta Urena v. Schindler Elevator Corporation, Columbia Sussex, Otis Elevator Company, (U.S. District Court for the District of Alaska Case Number 3:15-cv-00223-RRB, complaint filed 09/08/15); ECF No. 10, ¶ 5.
On January 24, 2016, a 7.1 magnitude earthquake struck the Anchorage area, causing damage to the Hilton Anchorage consisting mostly of cracked ceilings in guest rooms and bathrooms. The hotel reported “wet carpet” and/or “water damages on wallpaper” in a number of rooms. As of March 28, 2016, the hotel reported that numerous repairs had by then been effectuated. This is the most current information in the union’s possession.