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LeMéridien To Leave New Orleans Hotel; Interstate To Manage LaSalle-Owned Property

Effective today, the Le Méridien flag has been taken down from the LaSalle-owned hotel at 614 Canal Street in New Orleans, the result of nearly a year’s worth of legal proceeding between LaSalle Hotel Properties and Le Méridien, based in the UK. The property will be renamed the New Orleans Grande Hotel and will be managed by Interstate Hotels and Resorts, according to Michael Barnello, COO of LaSalle. LaSalle has been engaged in legal struggles to oust Méridien from the 494-room property since December of 2001. A similar struggle continues over LaSalle’s 407-room Dallas property. Méridien has operated the New Orleans hotel since 1984, and has operated the Dallas property for me than two decades. Both were later leased to Méridien, but when Méridien was sold by its former parent company Granada to Nomura International in 2001, that triggered a right in the lease for LaSalle to buy out Le Méridien’s interest “at fair market value.” According to Méridien’s prepared statement regarding the New Orleans property, LaSalle “refused to pay Le Méridien fair market value for what has been a highly profitable business.” But, said Barnello, “they never told us what the price should be. They just went straight to arbitration.” What followed in both New Orleans and Dallas was a series of legal contests, which eventually ended for the New Orleans property with a decision from the Louisiana Court of Appeal, dated Nov. 20, 2002, which stated that Méridien “must begin vacating the premises” by Decmber 20. According to its prepared statement, Le Méridien “fully intends to conduct an orderly and seamless transition to the new operator of the property, continuing to hold the interests our employees, our customers and the city of New Orleans in very high regard.” But according to LaSalle, Méridien is still refusing to cooperate with the transition, and has not given LaSalle access to meet with current employees of the hotel to ease the transition. The fact that new operator for the hotel will be managed by Interstate as an unbranded hotel will come as a surprise to some, after LaSalle’s earlier announced intention to turn both the New Orleans and Dallas properties into Westin Hotels. But, said Barnello, “we are still 100% committed to making Dallas into a Westin, and it will be a Westin just as soon as Méridien is forced to leave. We just thought that it would be best at this time to bring Interstate in for New Orleans.”

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