The Omni Inner Harbor Hotel is to be sold to a group led by a Dallas investment advisory firm for about $18 million, with a closing likely to occur in August.
Hotel general manager Joseph Kane said Patriot American Acquisition Corp. signed a contract Wednesday to buy the hotel from Westinghouse Electric Corp.
Westinghouse put the twin-towered hotel up for sale as part of a plan to liquidate its troubled real estate portfolio held by its investment arm, Westinghouse Financial Services.
Although the hotel's approximately 450 workers got a 60-day notice of prospective layoffs Thursday, Mr. Kane said few have anything to worry about.
"The vast majority of people here are probably protected," Mr. Kane said. "When you buy a hotel you buy the staff as well as the physical asset."
Randal W. Howard, senior vice president of Patriot American, said the new owners will be a consortium of American and offshore pension funds, with Palm Beach Hotel Group Inc. joining the venture as a partner. Palm Beach will manage the hotel, taking over from Guest Quarters, a unit of General Electric Co., Mr. Kane said.
Mr. Howard said the new owners have not yet determined all of what they will do to the 702-room hotel, located at 101 W. Fayette St., a few blocks north of the Inner Harbor. He said the first step will be to upgrade amenities like the quality of the hotel's linens and window treatments, as well as to spruce up the property's common areas, such as conference rooms.
"We saw [the Omni] as a situation that had been undermanaged for several years," Mr. Howard said. "The owner had lost the ability or stopped funding capital programs. It created an opportunity for someone to come in and spruce it up a little bit."
The hotel, like others in the industry, struggled to keep occupancy up during the recession. Westinghouse took over control of the hotel from a partnership led by local businessmen John Paterakis, Henry J. Knott and Martin G. Knott.
Mr. Howard said the hotel's low price, far less than the $45 million Westinghouse had invested in the property, will be the key to letting Patriot American succeed where earlier owners failed.
"Assets are being recapitalized at the levels where they do make sense," he said. "The people before us may have had too much money in the asset and been paying too much debt service."
Westinghouse sold the hotel as part of a nationwide sealed bid auction of hotels managed earlier this year by two national real estate firms. The Omni was the only Westinghouse-controlled hotel out of the 23 offered for sale.