Culver City : Hotel Seeks Bankruptcy Aid

The operator of the Howard Johnson Plaza Hotel, one of the three big hotels in the city, has filed for bankruptcy protection while it tries to negotiate a more profitable agreement for running the hotel.

A spokeswoman for the hotel company said that the Plaza, at the southern edge of Culver City next to Fox Hills Mall, would remain open through the negotiations.

Prime Motor Inns Inc., based in New Jersey, filed a motion in U.S. Bankruptcy Court this month to be allowed to reject contracts that are unprofitable at 25 hotel sites around the country, including the Plaza. It said that leasing costs for the hotels were about $25.8 million a year, but its operating income is about $11.6 million. Prime Motor and the hotel site owner, Cargill Leasing Corp., would not give figures for the Plaza alone.

Officials of both companies said they were negotiating and hoped to reach a decision soon. Last month, Prime Motor sent a letter to hotel employees saying there was a possibility that the 200-room Plaza would close if talks failed.

Prime Motor spokeswoman Nancy Fisher said this week that “we hope to maintain operating” the Plaza. “Closing could be an eventuality, but we expect the property would operate under one management or another,” she said.

Cargill general manager Perry Mead, meanwhile, said: “I would think something will (work out). There’s no incentive for anybody to see it close.” Cargill, based in Minnesota, has owned the Plaza site and structure since 1986.

Culver City will collect $1.6 million in bed taxes this year from hotels and motels, the bulk of it from the three large hotels in Fox Hills--the Plaza, the Ramada and the Pacifica. Bed taxes account for 3.7% of the city’s general fund.

The Ramada was sold this month, and the Pacifica has been up for sale for several years. But city officials said they were confident that all three would remain open.

“Just because it changes hands doesn’t mean it’s a bad sign,” said an official in the city treasurer’s office, adding that a new owner or manager might launch renovations or innovative marketing.