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The owners of the Claremont Resort and Spa announced on Thursday that they have an agreement to sell the fabled hotel to an Orlando-based real estate investment trust. 

The Claremont transaction is part of a $1.4 billion sales agreement for all the properties owned by its parent company, KSL Recreation Corporation. Included in the deal are resorts in Hawaii, California, Arizona and Florida. The buyer, CNL Hospitality Properties Inc., will assume nearly $800 million of debt owed by the Claremont’s parent company. 

Along with the property, CNL will also acquire a labor dispute that has ensnared the Claremont for nearly two years. The Oakland-based Hotel Employees and Restaurant Employees (HERE) union local 2850 have been running a general boycott of the hotel in an effort to force them to re-negotiate two existing contracts and sign a new contract for spa workers.  

Representatives from local 2850 said they are waiting to see who will officially manage the Claremont once the deal is closed. Before the sale, union representatives said they hoped KSL would not stay on as the property manager because of their poor treatment of workers.  

Claremont spokesperson Anne Appel said no immediate changes are expected at the hotel as the transaction is finalized. “It is business as usual at the Claremont Resort and Spa and we are looking forward to our relationship with CNL Hospitality Properties, Inc.,” she said. 

According to spokesperson Patricia Peeples, KSL expects to sign an interim management agreement with CNL when the deal closes. This would allow KSL to continue running operations at the Claremont and other properties. A similar agreement was signed in December when CNL bought the Hotel del Coronado in San Diego from KSL.  

The union is also involved in a labor dispute at the Hotel del Coronado and at several of the other properties CNL will acquire in the new deal. Concerning the Hotel del Coronado, Leslie Fitzgerald, an organizer with HERE local 2850 said CNL has not moved towards settling the dispute. 

According to KSL, the sales are needed to pay off its investors, including Kohlberg Kravis Roberts & Co. (KKR), which provided $536 million of KSL’s initial start-up funding back in 1993.  

Representatives from KKR could not be reached but according to researchers for local 2850, KKR is funded primarily by public pension funds, several of which are liquidating those accounts. 

CNL owns 130 hotels across the country. 

“[CNL] is a large corporation with a very small heart, just like KSL,” said Fitzgerald from local 2850. “If they don’t [negotiate at the Claremont] they will become a target just like KSL. It may be that they are willing to negotiate but that remains to be seen. We will do whatever it takes to win a fair contract for the Claremont.”  

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