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Hilton Pittsburgh: Contractor, city tourism agency cut ties with hotel over outstanding bills
Wednesday, June 24, 2009

From a room on the 17th floor of the Hilton Pittsburgh, the view is hard to beat. As dusk fades to night, a fiery sunset gives way to gentler hues of orange and purple beyond the confluence of the city's rivers.

But it's the views from the ground that are raising the most concern about the historic Pittsburgh hotel, the city's largest with more than 700 rooms. From there, a rust-colored steel shell stands as testament to the hotel's ongoing financial problems. Yesterday, Allegheny County Executive Dan Onorato described the partially completed structure as an "eyesore."

The contractor, P.J. Dick, has stopped working on the addition, claiming $317,273 in unpaid bills. Meanwhile, VisitPittsburgh, the city's tourism agency, confirmed yesterday that it had suspended the hotel's membership because it hadn't paid its annual fees.

Craig Davis, VisitPittsburgh vice president of sales and marketing, said the agency had "carried" the hotel for a number of months without payment in an effort to be supportive. But it decided recently it no longer could do so. Membership won't be restored until the balance is paid in full, he said.

"The board felt that carrying them any longer would have been a disservice to other paying partners," Mr. Davis said, adding that he did not know how much the Hilton owed.

The annual fees are calculated based on the number of rooms at the Hilton. The membership allows the hotel to advertise on the VisitPittsburgh Web site and gives it access to business leads and other services.

Neither Jon Shisler, the hotel general manager, nor Harris Mathis, chief operating officer for Shubh Hotels LLC, the Hilton's owner, could be reached for comment.

Shubh purchased the hotel from Hilton Hotels Corp. for $28 million in 2006. As part of the deal, Shubh and Hilton negotiated a franchise agreement to keep the Hilton name.

The suspension is the latest in a series of financial woes that have beset the hotel since the start of a $25 million renovation project more than two years ago.

P.J. Dick also pulled its workers from the site last year after filing a lien for the nonpayment of $575,539. That lien was satisfied in full last November, and work resumed.

At the time, the contractor was one of more than a dozen companies that filed mechanics liens or claims against the Hilton for hundreds of thousands of dollars in unpaid bills. Since then, nearly all have been settled, although two default judgments were entered against the hotel.

Earlier this month, agencies representing four different unions filed complaints against Shubh claiming that it had failed to make more than $34,000 in various pension, fringe benefit, annuity and dues-related payments in March and April.

Jeffrey Leech, attorney for the unions, said Shubh has since paid for one month but still owes for the other. He said the payments have been an ongoing problem.

Shubh also ran up more than $440,000 in delinquent county hotel-motel tax at one point before paying about $400,000 in February and arranging payments for the rest. It has stayed current on those, county Treasurer John Weinstein said.

In the past, Shubh attributed the problems to trouble in raising financing. It also has said the renovations proved to be more costly and time-consuming than anticipated. The problems were expected to dissipate after Florida-based Shubh, a privately owned real estate investment company, secured new financing last fall.

Renovations have involved both interior and exterior work. Inside, the work included new carpeting, ceilings, painting, flat screen televisions, and other improvements to guest rooms, much of which was evident during a stay Monday night. Nearly all of the interior work has been completed.

The addition, meanwhile, was originally to have included a swimming pool, health club, expanded banquet facilities, and other improvements. But so far, it has gone no further than the structural steel work.

Kevin Evanto, Mr. Onorato's spokesman, said "every effort's going to be made to get that looking presentable" before the G-20 economic summit Sept. 24-25.

At the request of the White House, members of the State Department will be staying at the hotel during the event, Mr. Davis said. No foreign heads of state will be there.

Even if the addition isn't finished by the prestigious and high-profile summit which will bring thousands of dignitaries and journalists to Pittsburgh, Mr. Evanto does not believe it will mar the city's image.

"The city's going to look fantastic for this summit. We're hoping the Hilton will be able to address that structure but that's not going to tarnish our beautiful skyline," he said.

While the unfinished structure outside has grabbed most of the attention, not everyone has been satisfied with the experience inside.

Seth Beckerman, a freelance writer and editor who served as local arrangement chairman for The Council of Science Editors annual meeting at the hotel in early May, said the experience was "less than satisfactory."

He said many guests complained about poor Internet connectivity in their rooms. He also said the service was "very, very poor" throughout the event and that there appeared to be inadequate staff in the restaurant and bar.

"Clearly, we're never going back there as long as it's owned by this group," Mr. Beckerman said.

However, several guests who stayed at the hotel Monday night generally were pleased with the experience.

Scott Cairns, of Cleveland, said his 16th-floor room was "very clean, very nice" and "what you would expect for a Downtown" hotel. He was particularly impressed with the elevators, which he said were fast and smooth.

"At some hotels, you seem to wait forever for an elevator so that was actually very good," he said.

Tim Mowrer, of Lancaster, and Ben Bannon, of Cedar Rapids, Iowa, in town for an American Junior Golf Association event next week, said that while their room was smaller than one they had at a Hilton in Chicago, it was "acceptable" for their purposes, they said.

Rachel Fetty and her daughter, Alisha, 7, of Wilmington, N.C., meanwhile, had nothing but good things to say about their 19th-floor room. "It's like the best hotel I've been to in a while" Alisha said.


Correction/Clarification: (Published June 25, 2009) The Council of Science Editors met at the Hilton Pittsburgh in early May. The group was incorrectly identified in this story as originally published in June 24, 2009 editions.
Mark Belko can be reached at mbelko@post-gazette.com or 412-263-1262.
First published on June 24, 2009 at 12:00 am
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