WTC Records Folder 0124 Clippings label, Sept 2001

NYC 9/11 Public—Portal Document Fax:7880074 Oct 4 2001 17:37 P.03

Oct. 04 2001 17:22 HP LRSERJET 3200 p-3 U.t d4 11X1 13:j$S PR JLiSEPH E. SPI *WO 212 669 2S3e TO P. uc' PISCITELLI P.03/03

Drag rtr of boW exeeutm asmtdttee I Presenmton to City by Hotel Assoeitriot of New York City Pe: Hotel industry property tax relief

The pwpoae of this letrait$to seek equitable 'propesty taxrelisf' for New York Cily'howls, specifint)y.tuittteore to the property tax psysMt due 14 ]artistry, 2002.

the hotel industry facet 4vere tectonic hardship in the light of the September I1°i terrorist streak In the fast ei& exendts of 2001, prior to 9pptcmba l la, hold revenue had decreased I5 'h-20% whet compered tote year 2000. This translates into a 35Yo-4059 profit decline. Since September 1ll, occupancy bas dropped by 60% and room ra rat have declined by 40%. proptttt tales an the sazgle largest fixed cost iuntrred by hotel. other than debt service. Given the occupancy and revenue dedrene, the impact of this expense rn hotel profits is disproportionately greater than normal ad the nonotimg ghost term i sot s severe. The industry believes this trend will camerae for at least the next six mesuht.

As it now smelt, the hole) indutey's anticipated cash flow Will not permit hotels to make the properly i paymm% 4ue . in ]wary. What ha 4pened is not the usual moderate up or down tad in hotel revemms, which is "ly ' mrnageablt: J1naasib fr0F1 year to yeas. This is an unpreeedented ecorwsoie situation and bas already bad in adverse Impact od oar induaxy't ability to maintain what would be normal empla Grit levels. Prior to September 112', the hotel iadasuy, which was tirn4txpnint:ing layoffs, and reduced work weeks, en ployed30000 people. Sinai September Ii a, the inahsety has to ro4aae overall staffing by approxiomtely 5.000 cnasloyea. Addidanally, the etduatry bat had to irsrodute a attdaeoxy there or four day work weela. In order to reduce the naglhve impact on union ataS the hotel association his anted n .0o0,o00 fund to teaisudn they medical bettcfitt We believe the employment situation w1R . only got worse in the fa~eeable future. Immediate property lax relief will Felp mitigate this adverse impact on our ce'ployees. I

The property lass .aownertsysta t was never designed to anticipate such' eatast optic busirtca drop-o8 As we are all swan, opeestr g results 1r4n calendar years 1999 and 2000' eve star to the torte* assessed vehtra Ord the tax payment due is January, Subsrquut moderate downturns, like those espn.eneed prior to September 116, are Stored into Mr yew payments using the ó orj assesamerl methods used In the normal course. But the present igta of Gavel and waime to New York City 4 tot normal.

TM 2002 to appeal prat I , whilo ofT i tg the posttbilhy of relief to offset unduly high 2002N3 oneiatoenrs will not provide bear, owners with • relief scan enough. The probability of loan defaults and bmdrupk{ei in the dearsae aae very real. In light of the itpeoid circuamtaeces, the howl industry needs relief now, not daelng the 2002 +ace appeal process. For Arose hotels lbrced oat of business by the Current situation. relief duotsgh the neural tousle appeal process Will be an pynrhie victory.

auto on the above, we s est one of the followtg:

1) Oist gbt relief from the y, 2002 tax psyntenl. The industry needs the tax relief now to notch its cashdlnw, not two years fromnow in the course of the usesstnent process.

2) Defer the )muwy 2002 nm igifil 2002/2007 assessment; are p sblislsed er,d the admctistrative challenge process is completed. Than. the s half tax payme:tt for 200112002 would be Trade or the basis of Pz trwb salasland assnaed values

The hotel tndsatt1is not poalton to make normal com e property tax psynsentt ealeulatcd early tbia year. .The attack of Septsmba I I has at lit diaivpted else normal operation of our b siness and our ability to pay.9te In as uleulateb' $ocond only to the fins industry in tams of driving the New York City economy, hotels and tomicm are tiggolaly besieged by the cwrent a. With ttto city's help, we eon weather this cnsis and servo to )tmg term profitability arid provide tax rsvetues In :dance with our ability to pay.

r+ TOTPL PE. a3

NYC-WTC 000137193