A large downtown hotel plans to reopen in a few weeks: Signia Hilton

0

SAN JOSE – A long-shuttered hotel that’s a landmark in downtown San Jose is slated to reopen as early as next month as Signia by Hilton, according to web posts from the new hotel operator.

Signia by Hilton San Jose, known for decades as Fairmont San Jose, could be weeks away from reopening, a remarkable turnaround for a hotel that went bankrupt and closed last year.

Separately, lender CLNC Fair San Jose Finance, which is affiliated with BrightSpire Capital, provided a large sum of money to bolster the hotel’s financing, according to documents filed with the Santa County Recorder’s office. Clara.

BrightSpire Capital is the hotel’s primary lender, located at 170 S. Market St. in downtown San Jose.

The affiliate provided $ 185 million in funding for the hotel, according to documents filed in November 2020.

Hilton has posted several vacancies for key positions at the soon-to-reopen hotel, according to the accommodation titan’s website.

Among the positions posted by Hilton is that of Director of Engineering and Real Estate Operations. The hotel also intends to hire a restaurant chef to oversee the culinary staff, job postings state.

In either case, the new hires will oversee unionized staff, according to job listings published by Hilton.

“Hilton is expanding its presence in the Silicon Valley capital of downtown San Jose,” the hotel giant said in the post.

The hotel’s new name is “Signia by Hilton San Jose,” according to job listings.

Operated for more than 30 years as the Fairmont San Jose, the 805-room hotel filed for bankruptcy and closed in March 2021.

“With an opening date of early February 2022, this exciting Hilton-managed hotel will feature more than 800 rooms in two towers combined,” Hilton said in both job listings.

In a Nov. 3 filing with the Securities and Exchange Commission, BrightSpire Capital, the hotel’s main lender, estimated the hotel could reopen in the first quarter of 2022, by the end of March.

Hilton also noted that the hotel offers 65,000 square feet of meeting space.

In August, a federal judge ended the bankruptcy by approving a confirmation plan to reorganize the hotel’s finances.

Shortly after the bankruptcy began, the hotel owner terminated his management contract with Accor Management US in order to pave the way for Signia Hilton to become the new manager and operator of the hotel.

A big obstacle to the reorganization of the hotel’s finances emerged in June when the bankruptcy judge in charge of the case estimated that Accor could have suffered up to $ 22.2 million in damages when the owner of the hotel terminated Accor’s management contract.

However, the owner of the hotel and the Accor Management group reached an agreement that removed the main obstacle to a financial overhaul of the hotel.

Signia Hilton has agreed to make a payment of $ 15 million to bolster the hotel’s operations and finances. In addition, JPMorgan Chase is granting a loan of $ 25 million as an additional bulwark for the hotel.

Ongoing economic hardship triggered by the coronavirus played a significant role in the hotel closure and financial difficulties.

“The onset of the COVID-19 pandemic in the spring of 2020 created challenges, including lower occupancy rates, weaker financial performance, and borrower funding of approximately $ 18.6 million in deficits to maintain operations, “BrightSpire Capital said in the regulatory filing with the SEC. .

This ultimately led to the filing for bankruptcy and the lodging shutdown, according to the lender and hotel owner, a group led by San Ramon-based business executive and real estate investor Sam Hirbod.

Hirbod said in comments provided to that news agency in August that he believed Hilton could organize a turnaround for the ailing hotel.

“We are extremely confident in Hilton’s approach to hospitality, in their understanding of this asset and in their knowledge of the market,” said Hirbod.

Share.

Comments are closed.