Guide to Your Financial Future

Return to Article

Resort Developer Sues Marriott Over Cost Overruns

The Associated Press

NEW YORK (AP) — A lawsuit has been filed against Marriott International Inc. alleging that the hotel company gave fraudulent budget estimates to real estate developer Miller Global Properties LLC for a new resort in San Antonio, Texas.

The 1,000-room JW Marriott San Antonio Hill Country Resort and Spa is scheduled to open in January 2010 under Marriott's management. It includes a luxury hotel and two PGA Tour championship golf courses, among other amenities.

Miller Global claims in the suit, filed Wednesday in Colorado State Court, that Marriott provided "fraudulent budget estimates" before transferring development responsibility for the resort to the firm in 2007. The developer said Marriott then demanded changes to the resort design and disregarded a contractual obligation to help cover the overruns.

A Marriott representative did not respond to a request for comment.

Bethesda, Md.-based Marriott and several other major hotel companies have been shedding real estate assets and focusing on property management.

Miller Global said the project costs were about $90 million over budget by September 2008. The firm and its affiliates are seeking more than $200 million in damages.

Marriott shares slipped 36 cents to $22 on Thursday.