NEW YORK » When a Chinese insurance firm bought the Waldorf Astoria Hotel for $1.95 billion this year, it said it planned to convert part of the aging building into high-end condominiums, while maintaining a smaller five-star hotel.
Standing in its way were the hotel’s 1,221 union workers, whose jobs were protected by the Waldorf Astoria’s contract with the New York Hotel and Motel Trades Council, a union that represents hotel workers.
Now, the owners of the Waldorf, New York’s largest union hotel employer, have reached a record deal with the union in which the hotel could pay almost $149 million in severance packages to its employees over the next two years. The average payout will be more than $142,000, with a handful of employees eligible for more than $300,000. One longtime worker is walking away with $656,409.68.
"It is a great deal," said Peter Ward, head of the Trades Council. "There are people of retirement age, hundreds of them, that are getting over $200,000 in severance."
Edgar Infante, 53, a head room-service waiter who has worked at the hotel for 22 years, is one of them. "It will never be the same again," he said. "When Frank Sinatra was alive he would ask me always for a Jack Daniels with a splash of Evian. Later in his life, when he got sickly, it was an Evian with a splash of Jack."
Former President Bill Clinton knows Infante by name, and in Infante’s basement at home, he keeps a Waldorf menu signed by Clinton and former President George H.W. Bush when the two met at the Waldorf after Hurricane Katrina.
Under the terms of the deal, employees will receive 29 days of pay per year they worked, or 58 days if they are tipped employees. The typical union severance package is just four days of pay per year, or eight days for tipped employees. "In terms of days of pay, this is the largest severance package that we have negotiated in the history of the union," said Richard Maroko, the union’s general counsel.
The Trade Council negotiated with Hilton Worldwide, which operates the Waldorf, and the Blackstone Group, which owns 46 percent of the hotel chain, over several months this spring. (Hilton will continue to operate the Waldorf in a 100-year agreement it signed with the new owner.) As the negotiations were occurring, a bill backed by the union was making its way through the City Council that would have placed a moratorium on hotel-to-condominium conversions like the one the Waldorf is planning.
Then last month, around the time that the large severance package was finalized, the City Council approved the legislation, placing a two-year ban on owners of Manhattan hotels with at least 150 rooms from converting more than 20 percent of the rooms to condominiums. But hotels that had been purchased in the previous 24 months and where the buyers had expressed an intent to convert were exempt, including the Waldorf.
"It was a fortunate confluence of events that a bill we were working on for 18 months was moving in the council at the same time as severance negations heated up with the Waldorf," said Josh Gold, the union’s political director. Blackstone and Hilton both declined to comment.
When news first broke that the hotel was sold, to the Anbang Insurance Group, "everyone was walking around so sad, hugging each other, talking to people they didn’t even know," said Sonia Randolph, 52, a telephone switchboard operator at the Waldorf for the past 28 1/2 years. "But after we found out about the enhanced severance, everyone was so happy, walking around with smiles all around."
Employees have three choices: take their severance now and stop working within 60 days; take part of their severance now but continue working for two years or until the hotel closes, whichever comes first, and then receive the rest of the severance; or continue working until the hotel closes, then take the smaller, traditional union severance and go on a rehire list. When the Waldorf reopens, those on the rehire list could be brought back, but if they have not been rehired within one year, their rights will expire and they will be given the remainder of the enhanced severance package.
While the older generations are mostly leaving, many younger employees are opting for the rehire list. Ray Gorritz, for example, has worked in the hotel’s catering department for 37 years, "or two-thirds of my life," he said. But at age 58, "I’m not eligible yet for Social Security, so I have to take my chances. I’m very fit for my age, and with my experience I think there is a good chance I could be brought back."
As for Randolph, the switchboard operator, she is opting for the second choice, and will take some severance now and continue working until the hotel closes. "I have to be smart with my spending," she said, adding that she is investing the severance pay and is also attending nursing school. Vacation is far from her mind. "Maybe when I stop working I will take a week and go somewhere," she said. "I haven’t focused on that. Maybe I’ll go to the Caribbean."