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Pittsburgh Hilton's Restructured Ownership Group to Invest Additional $6 million
 in Project; Vows Work to Restart Within 30 Days

By Rick Stouffer, The Pittsburgh Tribune-ReviewMcClatchy-Tribune Regional News

Mar. 4, 2010--Work on the Pittsburgh Hilton Hotel's long-delayed expansion project will restart within a month, about the same time needed to finalize the Downtown building's new ownership team, people involved with the deal said Wednesday.

The exterior of the $25 million expansion will be enclosed by year's end, with a planned third-floor swimming pool part of the initial work, said Jay Lalwani, part of an investor group led by Tampa cardiologist-philanthropist Kiran Patel. Lalwani is CEO of Black Diamond Hospitality LLC of Boca Raton, Fla.

The new ownership team will inject at least $6 million in new money into the Hilton, Lalwani said, to pay off at a negotiated, reduced rate of about $3.2 million on more than $4 million in liens and lawsuits filed by unpaid vendors and workers, and to finish the expansion.

"We're looking at putting retail on the ground level of the expansion, some sort of restaurant, perhaps a Starbucks, something not operated by the hotel," said Lalwani, who came to Pittsburgh last summer when asked for assistance by the facility's then-sole owner, Shubh Hotels LLC and its CEO, Atul Bisaria.

New York-based BlackRock Inc., the world's largest money manager, continues to hold a $49.6 million mortgage on the property, and the Hilton name will remain on the hotel. Both BlackRock and franchiser Hilton Corp. have agreed to the new ownership structure, Lalwani said.

"In January, we finally came to an ownership agreement that everyone could agree to, a restructuring that was agreeable to BlackRock, and to get Hilton onboard," Lalwani said.

The new, as-of-yet unnamed hotel ownership group includes Patel, Bisaria and, in a minority position, Jorge Perez, CEO of Miami-based The Related Group, one of the country's largest condominum-builder developers.

Architect Steve Berry, who drew up the expansion project's original building plans, then last July requested the city's Bureau of Building Inspection revoke the plans due to nonpayment for his work, said yesterday he was meeting with the city later in the day to reinstate his original plans.

Michael George, CEO of Crescent Hotels & Resorts, of Fairfax, Va., said his company officially assumes management of the Hilton on March 14. George and Lalwani estimated that the hotel lost about $6 million in business that went elsewhere during 2009.

"This will be a transitional year for the hotel," said George, whose company operates a number of Hilton-branded facilities. "We're holding meetings all day today with associates at the Hilton, welcoming them to Crescent."

George believes it will take about six months to bring credibility back to the troubled hotel, which includes getting out and again selling and marketing the property locally to potential room and facilities users.

Lalwani business associate and construction veteran Robert Hasick will be onsite to monitor the project. P.J. Dick Inc., based on the North Shore, once again will be the project's prime contractor, Hasick said.

Rick Stouffer is a Pittsburgh Tribune-Review staff writer and can be reached at 412-320-7853 or via e-mail.

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Copyright (c) 2010, The Pittsburgh Tribune-Review

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