The Atlantic City Sheraton may be the city’s official convention center hotel, but it has never drawn much more than 15 percent of its room rentals from convention goers.
But city officials are again talking about seeking more convention business, and Sheraton officials hope to refinance the 500-room hotel’s debt in hopes of better times.
“It has been a difficult time in Atlantic City for this convention center hotel,” Thomas Scannapieco, a Pennsylvania developer who heads the Sheraton’s Headquarters Hotel Associates ownership group told the Press of Atlantic City.
The hotel is financed through several layers of private and public debt and costs $88 million to build, opening in 1997.
Scannapieco told the paper he plans to refinance the hotel’s top two loans—totaling $31 million—at lower interest rates to save hundreds of thousands of dollars in debt payments.
But the constant stream of bad financial news about the city—which has seen its casino revenue fall precipitously and had four casinos close—has scared off some lenders.
“It is a never-ending series of disappointing news,” he said. “Atlantic City is not seen as a forward-moving, exciting place to invest in. We need to burnish the reputation of the city.”
The New Jersey Casino Reinvestment Development Authority, the state redevelopment agency that helped fund the Sheraton’s construction, has given its approval for a refinancing. The Sheraton is also supported by financing from its management company Starwood Hotels & Resorts Worldwide Inc., Scannapieco said.
Scannapieco said he would like to pay off Starwood in a refinancing and deal only with CRDA.
CRDA supplied the land and helped fund the Sheraton when it opened Nov. 18, 1997. The Sheraton was the city’s first new non-casino hotel in nearly a decade when it opened and was named the headquarters hotel for the then-new $268 million Atlantic City Convention Center.
However, the hotel has struggled as the resort’s convention business has struggled.
But CRDA recently too control of the city’s convention facilities and a new non-profit group has been created to book convention business.
“The CRDA has made some very, very strong strides in shoring up the convention center,” Scannapieco said. “I have to compliment the decision-making. They have really done the right thing to address a situation that was not working before.”
