Backers of Washington hotel in talks with bank

TALKS ARE taking place between the Irish backers of the five-star St Regis Hotel in Washington DC and Barclays Bank, which has threatened to foreclose as it seeks to recoup its $135 million in loans.

Reports in the United States yesterday suggested Barclays had foreclosed and would auction the hotel on October 22nd. But it is understood that representatives of Dublin-based Claret Capital, headed by financier Dómhnal Slattery; financial group Friends First; and US-based minority shareholder Brickman managed to postpone this process.

A foreclosure by Barclays would wipe out a $45 million equity investment held jointly by Claret, which is 25 per cent owned by Senator Feargal Quinn, and Friends First Private Investment.

Claret acquired a 90 per cent stake in the St Regis for $170 million in September 2007. This involved the $45 million in equity.

It then sold half of the equity portion to Friends First. Barclays provided two loans totalling $135 million to finance the deal.

Mr Slattery yesterday declined to comment on Barclays move.

Located two blocks from the White House, the St Regis has 150-rooms and 25-suites. In 2007, Mr Slattery said its purchase was a “unique investment opportunity – assets of this quality and reputation have a scarcity value as they rarely come to market”.

But the global financial crisis affected both the operating business and the hotel’s valuation.

In an interview with The Irish Times in August 2009, Mr Slattery said: “The St Regis is challenged, as are all five-star hotels in the United States..” In May 2008, former taoiseach Bertie Ahern made a highly-publicised visit to the St Regis after addressing a joint session of the US Congress.