Trenton Hotel Changes Hands Following $30M Bankruptcy
The Lafayette Yard Hotel opened in Trenton, New Jersey in 2002. Developers had hoped a soaring new hotel for the city would bring a new wave of tourists, business travelers, and leisure travelers — and with them, a new wave of growth and commerce. For Trenton, which is home to some 84,000 residents, a booming new hotel could have spurred financial growth, as well as burgeoning new opportunities for arts and entertainment. After a challenging decade, the Lafayette Yard Hotel has finally collapsed — but while the previous owners may have succumbed to a multi-million dollar bankruptcy, the new management has high hopes for the next chapter of Lafayette Yard’s commercial life.
Trenton Hotel Struggles to Generate Revenue
The eponymous Lafayette Yard Hotel opened on West Lafayette Street in Trenton, New Jersey in 2002. The towering hotel boasted close to 200 rooms, a titanic parking garage to accommodate the hundreds of guests, and some 11,000 square feet of space. It’s hardly a surprise that all of that hardly came cheap: with a hefty $60 million price tag, the hotel was a big investment for creditors.
Unfortunately for those creditors, it hasn’t exactly paid off. Contrary to predictions of bustling business, the stormy national economic climate around and then following 2002 was less than conducive to luxury spending on airfare and hotel bookings. As a result, combined with high operating and maintenance costs, the Lafayette Yard Hotel battled to turn profits throughout much of its life.
Ultimately, the beleaguered hotel hit rock bottom at $30 million in debt in August of 2013. Even Marriott, the hotel heavyweight previously associated with Lafayette Yard, opted to pull its affiliation, leaving the failing hotel with little to look to in terms of management. With the hopes to turn the Yard around dwindling, the hotel’s owners sought refuge in Chapter 11 bankruptcy — and once the dust settled, investors were keen to re-purpose the hotel’s remains.
New Ownership for Hotel… or Ex-Hotel
While the Lafayette Yard Hotel may have chosen to file for bankruptcy, Chapter 11 wasn’t to be the end of the hotel’s life cycle, but simply a transitional point. Because following the granting of the bankruptcy, two interested buyers were quick to take notice of the property.
One was VBCE. Hailing from nearby Winslow Township in Camden County, and experienced in hotel (and Dunkin Donuts restaurant) management, VBCE seemed like a shoe-in — but in the end, they were outbid by a competitor by the name of Edison Broadcasting. Edison came all the way from New York, without any hotel experience; but nonetheless, when the bidding level reached $6 million, VBCE bowed out, and the broadcasting company won control of the hotel’s reins.
Now that Edison Broadcasting has control of what was once the Lafayette Yard Hotel, what are their plans? Contracts say that the hotel must remain a hotel — but that stipulation has done little to silence rumors that the hotel may, in fact, become something entirely different. Some people suspect that, due to tax breaks, the hotel may be reincarnated as an education center, or even a rehab center — and they aren’t pleased. “I want them to keep this a hotel,” says Councilwoman Marge Caldwell Wilson. “I don’t want another rehab center in my district, don’t want an education center because its tax exempt. While I love education, why convert something that has the potential to be a revenue maker?”
Wilson makes a good point. After all, the hotel’s original purpose was exactly that: to serve Trenton as a “revenue-maker.” But at least for now, the fate of what was once Lafayette Yard remains uncertain.
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