Downtown Hilton to get new management, possibly new owner

Downtown Hilton to get new management, possibly new owner




Beginning Monday, the downtown Hilton will be under the new management of a Dallas-based company that will consider over the next 60 days whether to buy the historic hotel on Lafayette Street, which originally opened as the Heidelberg Hotel in 1927.



Prism Hotels & Resorts confirmed today it's taking over management of the Hilton Baton Rouge Capitol Center from the Baton Rouge Area Foundation's Commercial Properties Realty Trust, which owns the hotel.



"From the day we started on it, we kind of fell in love with it," says Kevin Gallagher, senior vice president of Prism Hotels & Resorts, which was involved in the hotel's renovations until its reopening in 2007.



Gallagher says his company will use a due diligence period in deciding whether to purchase the hotel, but would not estimate its worth. "Hotel values are a moving target," he says, adding that Prism will remain manager of the hotel regardless of its purchase decision.



Mukul Verma, a spokesman for the Commercial Properties Realty Trust, says the foundation had no intention of being in the hotel business for long.




"We are selling the hotel to return to our core business, which is real estate," Verma says.



The management deal has nothing to do with the arbitration award of close to $2 million that a state District Court judge confirmed in August 2011 for Ashby Hospitality, Verma says.



Ashby claimed it was ousted as manager of the downtown Hilton after the hotel owner demanded it pay the accountants in an attempt to reduce its management fee of 4% gross revenue. A three-member panel ruled that Commercial Properties wrongfully terminated Ashby's contract, and ordered the owner to pay management fees—with interest—that had been withheld for a year.



"Ashby hasn't been paid a dollar since the arbitration was won," says Ashby's lead attorney Stephen Babcock. A second arbitration hearing on the matter will take place June 14 involving a different three-person panel, according to Babcock.



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