The Signia by Hilton San Jose is a luxury hotel with a 13-story South Tower and 226 guest rooms, including 32 suites. Each room is spacious and features a view of downtown San Jose. The rooms are outfitted with high-quality furnishings, a Nespresso machine, a work desk, and Molton Brown bathroom amenities.
After the hotel owner filed for bankruptcy, a judge approved a settlement plan aimed at saving the property and reorganizing its finances. The settlement called for the hotel owner to pay the Accor group $15 million as well as a $25 million loan from JPMorgan Chase.
Accor Management Signia By Hilton San Jose
The former Fairmont hotel in downtown San Jose is undergoing renovations and rebranding as a Signia by Hilton. When completed, the hotel will have 805 rooms. It will be the second hotel under the meetings-oriented brand. Signia by Hilton San Jose brand is also planning to open hotels in Atlanta and Orlando.
Signia by Hilton San Jose hotel owner is now seeking a court ruling on whether the agreement between the two parties was in bad faith. Hilton was chosen by the hotel owner as the new operator, but the hotel has to inject another $45 million of capital to complete the deal. The hotel is also considering an rebranding, which could result in a $45 million investment from the new operator.
In the meantime, the hotel owner has found new allies in the courtroom. The hotel’s union and mortgage lender, as well as the city of San Jose, have lent support to its efforts to restore the hotel’s operations. During the court hearing, these groups stressed the importance of keeping the hotel open.
Accor management agreement clears primary obstacle to reorganization of finances
A judge has approved a settlement deal between the Hilton San Jose hotel owner and Accor Management U.S., the hotel’s former management company, clearing the primary hurdle to the hotel’s reorganization of finances. After the hotel filed for bankruptcy, the owner terminated Accor’s management contract and sought a settlement from the company. As part of the deal, the hotel’s parent company, Signia Hilton, agreed to provide $15 million in funds to strengthen the property’s finances. A $25 million loan from JPMorgan Chase was also agreed upon.
The agreement came after the Fairmont San Jose filed for bankruptcy protection in March. The hotel’s bankruptcy filing was in response to a months-long dispute with the hotel’s management company, Accor. Accor was accused of bad faith in terminating the agreement. The new management company is slated to replace Accor as the hotel’s manager, and the new name will be Signia by Hilton.
After a year of negotiations, the owners expect to receive a $45 million settlement from the new management company. This means that the Fairmont is preparing for the reopening of the historic landmark. In a court filing, the Fairmont claims that Accor Management did not do enough to help the hotel address its crumbling finances.
Hirbod could have taken a different approach in order to save the hotel, which has been vacant since March. During that time, BrightSpire Realty Investments filed for bankruptcy, but recovered quickly, and continued to inject money into the hotel.
Accor management agreement cleared primary obstacle to reorganization of finances
After months of uncertainty, the Fairmont Hotel may be able to reopen under a new agreement with Accor Management. The settlement involves a $15 million payment from the hotel and a $25 million loan from JPMorgan Chase. The new agreements will help strengthen the hotel’s finances. The judge estimated that Accor Management lost $22.2 million in damages in the bankruptcy.