Marriott settles with hotel owner

BETHESDA, Md. — Marriott International said Monday it has settled a lawsuit with the owner of a West Virginia hotel, one of several civil cases Marriott faces over alleged mismanagement at hotels it operates for other companies.

Marriott agreed to re-negotiate its management agreement with "minor" changes for the Charleston Marriott Town Center Hotel with the facility's owner, In Town Hotels Inc. Both parties agreed to extend their contract for 10 more years.

Marriott will loan $1 million to In Town for renovations at the 352-room hotel and will collaborate with In Town's corporate parent, Forest City Enterprises of Cleveland, on a new hotel. Details of that deal, to which Marriott will contribute $2 million, were not released.

No other payments are involved in the settlement, according to Marriott spokesman Tom Marder.

In Town Hotels filed an $18.5 million suit against Marriott last year, claiming the hotel operator secretly collected kickbacks from vendors, allowed two Marriott affiliated hotels to compete against the Charleston Marriott and engaged in "self-dealing transactions."

Marriott denied the charges.

It faces similar lawsuits from two other companies, CTF Holdings Inc. of Hong Kong and Strategic Hotel Capital of Chicago. The company settled another lawsuit over its management practices with The Flatley Company of Boston in December.

Marder would not say if Marriott was planning similar settlements with CTF Holdings and Strategic Hotel Capital. An attorney for Strategic Hotel Capital said there were no negotiations underway. CTF Holdings' attorney couldn't immediately be reached for comment.

By settling with In Town before the case went to trial in U.S. District Court in West Virginia, Marriott does not have to reveal financial details of its partnership with the company.

Forest City co-chairman Albert Ratner said the settlement had addressed complaints In Town had against Marriott.

"After our review, we are totally satisfied with Marriott's management practices at our hotel," he said.

Marriott runs hotels with brand names that include Marriott, The Ritz-Carlton, Courtyard and Ramada International. It typically manages facilities for hotel owners but does not own the properties itself.

Shares of Marriott were up 18 cents to close at $40.97 on the New York Stock Exchange.