San Jose, CA

Luxury hotel in Bay Area kicks out guests, including professional sports team, as it files for bankruptcy

Ed Walsh

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Photo courtesy Singer Associates, Inc.

A San Francisco Bay Area hotel, with a repuation for being one of the region's most luxurious properties, has declared bankruptcy and asked all its guests to leave including a pro sports team.

The San Jose Fairmont Hotel, in the heart of the city's downtown, annouced that it is filing of Chapter 11 on Friday. The decision that suprised many, including the hotel's guests.

The National Hockey League's Vegas Golden Knights, were among those who were forced out and had to scarmble to find other rooms. The team was in San Jose for a two-game series against the San Jose Sharks. The NHL team had just fininshed a pregame meal and they were asked to leave. The Knights did find other accomodations in the area.

"I think that’s a first for probably everybody on our team," Knights player Nick Holden told the Las Vegas Sun.

“It was a surreal experience,” coach Pete DeBoer told the paper “Hopefully this is the end of the COVID year, but it was almost the topping on the cake for what the last year has been for everybody in the world. Just another thing throw at you, another thing to deal with.

“Not that I’m putting it in the same breath as dealing with COVID, but it was just one of those things we got thrown at us, we dealt with it and found a way to get off to a good start, so good resiliency by our group.”

In a statement issued by the well-known public relations firm Singer Associates, the hotel stated that it hopes to reopen later in 60-90 days.

"The hotel ceased operations, relocating the few remaining guests to rooms at nearby hotels at ownership’s expense, " wrote spokesman Sam SInger.

“We know that by taking this difficult step we will come back a more vibrant hotel to the benefit of everyone in San Jose, including the vitality of the City’s downtown, nearby businesses, and Silicon Valley conventions in a post-COVID-19 world,” added Singer. 

"As a result of the pandemic, all conventions for 2020 and 2021 have been cancelled, and occupancy throughout the pandemic has been less than 7%," the hotel spokesman said. "The hotel lost at least $18 million in 2020 and is projected to lose at least another $20 million in 2021."

Singer added that the hotel will come back stronger than ever after its reorginazation

"When the hotel re-opens mid-year, ownership expects it will have a new manager/brand; one with the ability and willingness to infuse tens of millions of dollars of capital into the hotel and its operations, and a robust pipeline of future convention business for the hotel. 

"The impacts of the pandemic have been significant, Singer said. “The owner is committed to a process that will ensure the hotel’s long-term viability and drive business both to the hotel and to San Jose’s important downtown and convention center,” he added.

"The owner is guided by its goal of funding the hotel operations through the end of the COVID-19 pandemic.  The debtor filed chapter 11 to restructure the hotel’s business around three core objectives: (1) rejecting the existing hotel management agreement so that the owner can transition to a new hotel brand; (2) running a comprehensive process to solicit proposals from appropriate hotel brands who are willing to provide substantial exit financing for the hotel; and (3) extending the maturity date on its mortgage loan.

"The hotel is a landmark 805-room property at 170 South Market St., San Jose, in the heart of Silicon Valley.  The 20-story, two tower hotel has 65,000 sq. ft. of state-of-the-art meeting and event space, three restaurants with bars, a café bakery, a fitness center, and a rooftop pool and gazebo.  The hotel features grand ballrooms for large conferences and conventions as well as intimate spaces for smaller gatherings." 

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