Taxpayers To Kick In $7.9 Million More For Cuyahoga County-Owned Hilton

Cuyahoga County plans to chip in $7.9 million to help the downtown Hilton Hotel meet its financial obligations at the county-owned building, as the coronavirus pandemic ravages the hospitality industry.

Although Hilton runs the 32-story hotel, county taxpayers own it and are on the hook for the bonds sold to build it. This year, that debt payment comes to about $20.7 million.

Hilton had planned to contribute $9 million from its revenues for debt service his year. But COVID-19 has driven down occupancy and led to canceled events, county budget director Walter Parfejewiec said.

“The operating revenue of the hotel has diminished due to COVID, and in their operating reserve right now they don’t have the money to cover the debt service or the property taxes,” he said. “So we, as the owner of the hotel, are obligated to pay for that.”

The county proposes covering $6.5 million of Hilton’s share of the debt service, plus about $1.4 million of the property taxes.

That’s on top of the $9.5 million Cuyahoga County already planned to pay out of the general fund for hotel construction debt.

County council will consider the proposal at its Tuesday meeting.

The pandemic has wiped out a large amount of hotel business in Northeast Ohio. Hotels are typically about 60 percent full at the beginning of the summer, Destination Cleveland’s David Gilbert said last month. But this year occupancy stands at around 10 percent.

Cuyahoga County officials expect to miss out on $76 million in revenue this year after pandemic shutdowns dried up sales tax collections. Hundreds of employees must take the equivalent of 10 furlough days to help save costs.

News of the county hotel payment doesn’t sit well with Colin Sikon, a field representative for Laborers Local 860. The union represents public works employees, health and human services workers and other staff.

“We have custodians who make $15 an hour,” Sikon said. “It’s hard for me to tell my people that they’re being furloughed and they’re losing money so we can save a luxury hotel.”

The county finished construction on the $276 million, 600-room hotel just ahead of the 2016 Republican National Convention. The building is part of the complex that includes the Huntington Convention Center and Global Center for Health Innovation.