GlobeSt.com UPDATE: Le Meridien Loses Canal Street; Dallas Undecided

DALLAS-Effective Dec. 20, LaSalle Hotel Properties gets to replace its longtime operator at the 494-room Canal Street hotel in New Orleans, ending 11 months of legal maneuvers to oust Le Meridien. In Dallas, another decision should come rolling in any day now in the ongoing battle over the 407-room Plaza of the Americas.

In a prepared statement, Le Meridien said it “fully intends to conduct an orderly and seamless transition to the new operator of the property, continuing to hold the interests of our employees, our customers and the city of New Orleans in very high regard.” The UK-based hotelier added that it hopes to maintain a presence in New Orleans and is “actively exploring alternatives” to keep the brand in town. The statement did not address the status of the Dallas hotel.

A Louisiana arbitration board ruled Nov. 20 that Le Meridien had 30 days to relinquish the New Orleans keys to the Bethesda, MD-based property owner, LaSalle. A third-party operator is waiting in the wings to take over, but LaSalle’s not putting a name to the contract for now.

LaSalle must pay “fair market value” as determined by an arbiter’s panel to Le Meridien for the 614 Canal St. hotel. “They will get paid when the panel determines what they’re to get and when,” Michael Barnello, LaSalle’s COO, tells GlobeSt.com.

Barnello disputes that Le Meridien is being cooperative with the transition. To date, he’s not received records considered key to the switch for the operation or the non-union staff. Barnello said the new operator will be offering jobs to the several hundred employees in New Orleans and later in Dallas when the final bell tolls.

For all intents and purposes, it will be business as usual Dec. 20 at the Canal Street hotel. “One sign will come done and one sign will go up,” Barnello says. “If you have a wedding there, the wedding’s going to go on, but the name on the door will be different.”

In Dallas, LaSalle is awaiting a mediation ruling that could force a trial in a convoluted legal battle that has twice upheld the right to boot Le Meridien from the premises. Each time, Le Meridien appeals and delays the ouster. “If the answer goes our way, the mandamus clock starts ticking again,” Barnello explains. The 30-day ruling period expired yesterday, but the court has leeway due to the holidays.

Le Meridien has been the only operator in the 22-year history of the Dallas property. In New Orleans, it has held the contract since the mid-1980s. LaSalle told Le Meridien to vacate in January after the London-based chain was bought by the Japanese banking giant, Nomura International. LaSalle claims the ownership change altered the contract. which carries a 2008 termination date.

LaSalle acquired the New Orleans hotel in 1996. A year later, it bought the hotel component to Chicago-based Trizec Properties’ Plaza of the Americas in Dallas.