Chesapeake Hyatt Hotel Dips into Cash Reserves to Meet Bond Payments
Updated: Friday, August 2 2013, 10:22 PM EDT
A government-backed hotel built in Maryland now finds itself unable to generate enough money to meet bond payments. Just last week the state-backed Chesapeake Hyatt Hotel was forced to dip into cash reserves to make payments on $160 million in bonds issued by the Maryland Economic Development Co.
In a letter obtained by FOX45, the Hyatt’s Board says it must draw another $2 million from an emergency fund to make its most recent payment – depleting a “rainy day” fund just as payments on principal are coming due.
The Hyatt is not the only local, government-backed hotel having trouble meeting its financial obligations. Earlier this year Baltimore’s venture into the hotel business hit a snag when the Baltimore Convention Center Hotel was also unable to generate enough cash to make debt payments.