29 April, 2006

The Ugliness of Hilton

[This post draws heavily on information I received from someone involved with Friday Nights at Fran's for over two years, a reputable source. Some of the info has come from multiple sources.]

Spec. Maxwell Ramsey jokes with Ervin Street, left, as he is assisted to the ground to attend the last dinner at Fran O'Brien's Stadium Steakhouse. (By Susan Biddle -- The Washington Post)
Okay, I'm saying it now: Hilton wanted Fran O'Brien's out. Motivation? Unknown. But it's now very obvious that the Hilton management was underhanded, unethical, and downright lacking in character. They never intended to negotiate in good faith and they went about trying to drive Fran's out of the Hilton, if not completely out of business.

Pretty strong accusations, huh? Here's why I make them...

GM Kelleher tells the Washington Post that Fran's refused to make redecorating changes:

Hotel general manager Brian Kelleher said it was simply a business deal, a lease negotiation that broke down after restaurant owners were asked to spiff up the "dated" look and didn't comply and then were late on their rent.

The hotel asked the owners to update worn upholstery, install new carpeting, replace an aging canopy and polish the brass outside, but the owners refused, Kelleher said.
My reaction? You've gotta be kidding me! First of all, I've been to Fran's and I didn't see any "worn upholstery" or other signs of poor appearances. But more importantly, what kind of landlord says, "If you improve my property, then I'll give you a new lease?! A tenant business stupid enough to invest in facilities changes without a guaranteed lease doesn't deserve to be in business! And yet Capital Hilton made that their minimum demand before they would offer Fran's a new lease for consideration. There's no way Hilton could've thought that Fran's would accept such a demand, and thus Hilton's "negotiation" on that basis belies any claim to negotiations in good faith. Unbelievable!

Now, let's look at the "late on the rent" part of things. Guess what? The Capital Hilton owes Fran's over $8,000. Who's "late" on payments? For some unknown reason late last year, Hilton informed Fran's that due to new accounting rules, compensation for room service orders Fran's filled for the hotel would be paid every 120 days instead of every month. The owners thought it odd, but accepted it. 120 days came and went. No compensation. They were told it would be every 180 days. That deadline passed, too. As of April, Capital Hilton has failed to pay Fran's $68,061.73 in room service charges! Hal Koster told Hilton to take the rent payments out of what Hilton owed for room service. Hilton refused, and Hal stopped paying rent. Between rent and utilities Fran's now owe's about $60,000 and Hilton owes about $68,000. In actuality, Hilton is debt to Fran's!

Fran's was "late on their rent," huh? Granted, I don't think it was wise to withhold rent even though that was justified; it just gave Hilton's an excuse. But still, talk about lies by omission! I also have to wonder whether Fran's could've survived financially if they'd continued to pay their rent when they were "losing" a significant amount every month from unpaid room service charges. This is why I start to wonder if the Hilton's goal was to drive Fran's out of business.

It gets worse. Since Fran's was on a month-to-month lease extension, Hilton was free to change the rent amount. So, they nearly doubled it--to $25,000.

Obviously, Hilton wanted Fran's out of their building. But why go about it in this manner? Why not tell Fran's when their lease was getting short (maybe six months out?), "We will not be renewing your lease? End of discussion." People would mutter and wonder, but nothing would come of it since Fran's would have six months to relocate. No big deal. But instead Hilton chose the low road.

And the Capital Hilton GM, Brian Kelleher, has been even more underhanded than that. It has widely been reported that Kelleher and his staff had never participated in the Friday dinners prior to April 21, despite Kelleher's claims otherwise. On the 21st, in view of CBS and CNN cameras, Hilton saved a parking place for the bus full of soldiers, cleared the back hallway to the freight elevator the wounded used, and Kelleher was there with an umbrella to greet the people getting off the bus.

Others have corrobated this. Andi shares an email she received from a volunteer before the events at Fran's on the 21st:
Hi Andi -- I just wanted to clear up a couple things on your blog from your conversation with Hilton Manager Brian Kelleher regarding Fran O'Brien's Stadium Steakhouse. In the blog you say Brian and his staff meets all the buses. NOT TRUE. Veteran volunteers meet and greet the troops. Also, Brian Kelleher has NEVER attended a Friday Night Dinner for Troops...
If that wasn't enough to convince you Kelleher is "full of it," the following will show you how clueless he is. From almost the beginning of the PR push, Hilton said they'd be willing to host the dinners in a different location on the property--either their other restaurant, "Twigs," or in a ballroom. Last night here's how he described it to the Washington Post:

Kelleher said he understood that the privacy of the underground restaurant is part of its appeal -- that many of the "wounded warriors" are not comfortable being in public with their still-healing wounds or still-awkward prosthetics.

"We can use the back of my other restaurant," he said, or he can screen off part of a ballroom.
Boy does he not get it! Part of the charm and therapy of Fran's was that the wounded could either stay in the banquet room where they had the privacy of associating only with those they knew understood and accepted them, or they could venture out by degrees into the bar and other areas of the restaurant as they became more confident. And what's this about screening off "part" of a ballroom for use by the wounded? What did Kelleher have planned that would involve using the rest of a ballroom for something else while the dinner was held?? It just goes to show you he thought it was all about the food. You know: line 'em up, feed 'em, move 'em out. (/sarcasm)

Back to the business side of things... According to the WaPo article, Capital Hilton will be making the renovations Fran's requested, but after Fran's leaves:

But Kelleher said the hotel has been working on installing a lift system for the oddly-shaped, subterranean space and will see the project through once the steakhouse vacates.
Obviously, this kind of statement backs up Kelleher's assertion that Fran's was merely a bad tenant (didn't accept "reasonable" requests to spruce up the place, and refused to pay rent). The problem is, we know the rest of the story, as outlined above.

Still, I'm left with the question: Why? Kelleher says this was a local decision. If so, and if things are truly as Hilton has represented them, I'm surprised he still has a job! if this is a simple business negotiation with a bad tenant, he should be fired for how badly he's bungled the PR. But he still has a job, and moreso, Hilton Corporation seems to be standing behind him!

From a PR perspective, this is almost suicidal. I'm left to assume that Hilton Corp. has decided "toughing it out" in the face of campaigns and boycotts, and a disability rights community that is taking notes will do them less damage than acknowledging the PR mess and trying to remedy the situation (for example, giving Fran's another six months so that they can relocate smoothly). This in itself speaks to the obfuscation and lies of Kelleher--he obviously has something to hide and Corporate knows it. No corporation as big and prestigious as Hilton would let this PR disaster continue unless the alternative is even worse. And what's the "alternative?" I don't know, but my mind certainly wanders to issues of liability--not future, but current...

But as Greyhawk says, this story isn't over yet. I still wouldn't be surprised to see some kind of business lawsuit by Fran's or a class-action on behalf of the veterans.

In the meantime, those associated with the dinners are working to keep them going, in the hope that Fran's will eventually find a place to relocate and once again assume their role of sanctuary and inspiration for the wounded. In order to help bridge that gap, a charity has been set up:

The Aleethia Foundation
1718 M Street NW
Suite 1170
Washington DC 20036

Give what you can, and don't let up on Hilton. All is not yet lost, and we must follow through on our threats anyway. If we don't, we lose all credibility the next time we call on an organization to do something. I'll have more about that later.

[More on the Fran O'Brien's story here.]

P.S. I don't remember where I saw it, but somebody commenting on a blog about Fran O'Brien's vs. Hilton wrote, "Karma can be a real b****." The increasingly angry part of me certainly hopes so...