Hotel Loses $2.3 million

$2.3 million lost by Hotel Syracuse last year

Windows boarded up, "I feel like I'm on the Titanic," says general manager.

February 07, 2004

By Charley Hannagan, Post-Standard Staff writer

The Hotel Syracuse - struggling to survive as it awaits a buyer - lost $2.3 million last year, it told the U.S. Bankruptcy Court. It was double the $1.1 million loss reported in 2002. The hotel sought bankruptcy court protection from its creditors in August 2001.

The aging 600-room hotel, with some upper windows boarded up, anchors downtown's south end.

Its owners and workers have been hanging on in the hopes that someone soon will buy the building and restore its legacy of hosting celebrities and lavish social events.

For now, though, the 80-year-old hotel is slipping away. "I feel like I'm on the Titanic," said General Manager Brad Goodale.

In December the hotel rented 6 percent of its rooms. It averaged a 15 percent occupancy rate for the year. In 2002, the average occupancy rate was 22 percent.

Part of the problem stems from the hotel's attempt to cut expenses, Goodale said.

The hotel cut costs by cutting staff, he said. Then it limited the number of rooms it rents to 250 because the hotel would be doing guests a disservice if it rented more rooms but had fewer workers to serve them, he said.

"I want to make sure they (guests) go away feeling good about the hotel, because it will be sold, and it will be renovated, and it will come back," he said.

The hotel also dropped all of its meal service except for banquet catering. That cut costs, but customers like to stay in hotels where food service is available to them, Goodale said.

"They really don't want to go outside in the cold weather to get breakfast or lunch," he said. "Which before wasn't too bad because they had the food court next door (at the Galleries). Now that's going to be gone."

However, Goodale points out that all is not lost. The hotel has begun to lease tenants for its ground floor retail space. Recently Isabel & Co. Hair Design & Day Spa opened in the old beauty salon space at Salina and Onondaga Streets. Goodale said he expects to sign another tenant soon.

Estimates to renovate the hotel range from $10 million for a tune-up to $100 million for a taking-it-down-to-the-bare walls project. The original hotel, with 400 rooms, was built on Warren Street in 1924. In 1983 the 200-room tower was added.

"I'm heartbroken," said Ann Marie Taliercio, president and business manager of Local 150 of the Hotel Employees Restaurant Employees union. "That hotel is the center of this community and no one will convince me different."

The hotel employed up to 250 workers in its heyday, but now has about 75 full- and part-time workers. Many workers have left for other jobs because they were unable to get enough hours to earn a living, Taliercio said.

"I look forward to the new hotel being built," she said, referring to Onondaga County's plans to build a hotel to serve the Oncenter convention center.

There's enough business in the town to fill a convention center hotel and a renovated Hotel Syracuse, Taliercio said.

Buyers have nosed around the hotel over the years, but no one has consummated a deal. Valdor Fiber Optics, a Canadian company, got the hotel as part of a 2000 merger with Allegro Property & Finance. Valdor tried to sell the property. In August 2001, Valdor placed the property in Chapter 11 bankruptcy proceedings just as City Hall threatened to turn off its water for nonpayment.

At the time, the hotel owed creditors $18.4 million and had $19.1 million in assets. The property had an estimated value of $15 million.

It's difficult to know if the hotel made a profit in 2001 because records before the bankruptcy are sketchy. However, bankruptcy court records show the hotel earned $247,000 from August to December 2001. Those are usually the hotel's five best months, with the State Fair, conventions, Syracuse University football and holiday parties.

It lost $1.1 million in 2002, and $2.3 million in 2003.

In 2002 a bankruptcy judge put the hotel up for auction to collect money for creditors. No bidders came forward. So the judge allowed major creditors Titan Management and the First Bank of Oak Park to take over the hotel for $10.9 million. The hotel already owed $15.3 million to the lenders.