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NEW ORLEANS-Repairing the 1,184-room Hyatt Regency hotel in New Orleans will take at least all of 2006, while the cost will be less than the $350-million insurance coverage Strategic Hotel Capital Inc. has on the property. However, company officials said during their earnings conference call Thursday they have not completed their damage assessment of the property, which sheltered 3,800 during Hurricane Katrina and its aftermath.

In addition to a $350-million per-loss limit in its insurance coverage, Strategic Hotel Capital’s deductible for the Hyatt Regency in New Orleans is $11 million, according to chief financial officer Jim Mead. He added the company has received a $10-million advance from its insurance carrier and expects additional money before the end of the year.

“Insurance will be largely sufficient to bring the property back in service, in substantially new condition,” Mead reported. “We are comfortable we will not exceed our insurance limit.” However, president and chief executive officer Laurence S. Geller said, “It would be a stretch for us to have it in full service by Jan. 1, 2007.”

Company officials say they have business interruption insurance to cover losses during the months it will be out of service. The New Orleans asset’s earnings before interest, taxes, depreciation and amortization fell to $126,000 in the third quarter, according to the company’s report, down from $2.2 million during the same three months in 2004. For the first nine months of the year, EBIDTA is off more than 20%, to just under $10 million.

Although the damage assessment is incomplete, Geller said a “large majority” of the hotel rooms as well as common areas are in need of major renovation. However, any rebuilding will be coordinated with city, state and federal efforts to rebuild the city, he noted. That includes reconstruction of levees by the federal government, Geller said, as well as any new building codes mandated by the city.

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