The management of the Sheraton Baltimore City Center warned the state Tuesday that it expects to lay off the majority of its workforce by the end of May and the large Fayette Street hotel could close.

The notice filed with the Department of Labor, Licensing and Regulation by Crossroads Hospitality Management Co. said about 110 people could be affected by the May layoffs and a final decision about the hotel's status depends on the outcome of contract negotiations with the hotel's labor force. If the hotel closes, a total of 160 people would lose jobs, according to the notice.

Crossroads Hospitality is the operating division of Interstate Hotels & Resorts, which private equity firm Blackstone Group named in 2010 to run the Sheraton Baltimore City Center and 12 other hotels it acquired that year from Kentucky-based Columbia Sussex Corp.

Blackstone, which did not respond to a request for comment, has been shaking up its hotel portfolio in recent months. Officials at the commercial real estate services firm CBRE, which had been marketing the Baltimore property for sale, declined to comment.

Interstate representatives also declined to respond to questions about the downsizing and possible closure. Federal law requires most employers with 100 or more workers to provide notice about mass layoffs.

"We are still working through our plans so there is nothing yet concrete to share," Greg Juceam, Interstate's executive vice president for hotel operations, wrote in an email.

The Sheraton City Center stopped using one of its two 27-story towers several months ago, reducing the number of rooms from more than 700 to 323, according to the Downtown Partnership of Baltimore. The tower had been considered for conversion to residential apartments, said Mike Evitts, a partnership spokesman.

Evitts said the hotel would stop using the Sheraton flag at the end of May.

Negotiations about keeping the property open after that as a "limited service hotel," which would offer rooms but not perks such as full-service dining or a banquet room, are continuing, said Roxie Herbekian, president of Unite Here Local 7, one of two unions that represent about 130 employees at the hotel.

Herbekian said the layoffs, and possible closure, of the hotel were driven by the shift of tourism toward the water and the opening of competitors, as well as a lack of investment in the property.

"The hotel market is really down on the harbor now, so I think it makes it difficult for a property like the Sheraton to compete," Herbekian said.

The hotel opened in 1967 as the Baltimore Statler Hilton Hotel. It later became an Omni and then a Wyndham before taking on the Sheraton flag in 2006.

Herbekian said she did not think a long-running labor dispute and call by the unions for a boycott of the Sheraton City Center hotel, which ended after nearly six years in May, played a role.

The occupancy rate in hotels in the city was about 64 percent in 2013, two percentage points above the national average, according to the Downtown Partnership's annual state of Downtown report. About 400 rooms were under construction last year and 300 more were planned.

nsherman@baltsun.com