The U.S. Grant Hotel laid off 45 workers Tuesday night after the owner's efforts to restructure the troubled hotel's finances were dealt a setback. The layoffs caused a closing of the hotel's Garden Room restaurant and a sharp cutback of room service.
Hotel managing director Chris Venner said the decision to lay off employees was made after the hotel operator and owner, a partnership headed by Sybedon Corp. of New York, was unsuccessful in getting a new financing plan docketed for City Council discussion. The plan would require the city to subordinate its existing $6-million loan to a possible $1-million loan from Home Federal Savings & Loan.
Home Federal, which holds a $32-million second mortgage on the hotel, filed a notice of default against Sybedon on Sept. 29 saying Sybedon owed it $2.8 million in back loan payments dating back to February.
Home Fed could foreclose on the hotel as early as January unless Sybedon remedies the default.
Home Fed has offered to provide an additional $1 million in short-term financing to the hotel to pay vendors but only on condition that the city subordinate its existing loan to the new one. The city holds a $6-million third mortgage on the property, although interest and principal payments are not due for several years.