Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, July 25, 1993 TAG: 9307250106
SECTION: VIRGINIA PAGE: C1 EDITION: METRO
SOURCE: SANDRA BROWN KELLY STAFF WRITER
DATELINE: LENGTH: Long
"Enough is enough," said Pettus, a captain in the dining room of the historic luxury hotel in Hot Springs.
"I've been here 20 years, and things are not much different," he said last week.
Homestead workers are to vote Friday on representation by the Hotel and Restaurant Employees Union.
If they say yes to the union, a prospective buyer for the indebted resort says it won't buy. And if Club Resorts Inc. of Dallas doesn't buy The Homestead, its current owners say the resort will go bankrupt.
That doesn't mean it will "go down the tubes," Pettus said. "It's a well-known place."
Dan Ingalls, president of The Homestead and a member of the family that has run the resort since the late 1800s, agrees that there might be other suitors for the Bath County resort.
But, "for a place like this to go into receivership is a threat to its survival," Ingalls said.
"The kind of clients that make bookings at The Homestead book three years out. When they learn there is any uncertainty in The Homestead's future, they will move their business elsewhere," he said.
The sale agreement calls for the creation of a joint venture between Virginia Hot Springs and a wholly owned subsidiary of Club Resorts. Initially, Club Resorts will manage the property and be a minority owner and provide capital to operate and upgrade it.
Later, Club Resorts would become the sole owner.
The deal involves the 600-room hotel, a conference center, three golf courses, ski slopes and skating ring and other amenities on 3,000 acres.
Virginia Hot Springs would keep 12,000 acres of resort property, some of which has been developed with housing.
Ingalls said the Club Resorts offer contains five contingency clauses, but he considers only two to be major hurdles. These are the union vote and a requirement that the bank that holds Homestead loans agree to the venture.
The bank agreement "is not a done deal," he said, adding the bank "agrees it's in its best interest to work things out."
There is little chance the Virginia Hot Springs board wouldn't approve the sale. Board members lent the resort money to meet its debt, but have said they won't give any more.
Ingalls said Club Resorts is "an organization with an excellent track record in hospitality" and its "willingness to invest millions of its own cash and to assume The Homestead's existing bank debt is closer to a guarantee of survival than anything else that's available to us."
This is the fourth time a union vote has been held at the resort; Pettus believes it is the employees' last opportunity to get a structure that will give them a voice.
He said employees have had little power in the past in pressing for change. For example, he said, workers asked for dental and eye care insurance but didn't get it until just before last year's union vote. The union was defeated.
Other employees said some promises made by the company before that vote weren't kept, such as the vow to have monthly meetings between the general manager and employees.
Pettus is a Bath County native, but makes his home in Ronceverte, W.Va. His wife, Yvonne Pettus, is a union shop steward at The Greenbrier.
Pettus stays at The Homestead during his work week, paying $32 a week for a meal a day and a room in the waiters' quarters. The condition of the waiters' quarters was part of the controversy before last year's vote.
Pettus said some rooms can't be used because the floors are rotted through. About 90 workers are housed in the building.
He said some repairs were made after the 1992 vote, but the building is in such bad shape it can't easily be repaired.
Ingalls said a new facility is needed for waiters and that he has explored financing for it with the Virginia Housing and Development Authority. He said the resort is spending $200,000 to $300,000 to bring a second dormitory, the Virginia Building, up to standards.
Pettus and other workers who didn't want their names used don't think management has been truthful. Some workers even believe the sale is final and that the no-union requirement is just talk.
However, The Homestead's attorney - Gregory Robertson of the Hunton & Williams firm in Richmond - said the contingency is in writing and that The Homestead owners "had no choice but to make it public."
Club Resorts executives would not comment on the contingency except through a spokeswoman at Edelman Public Relations in Dallas.
She called "the whole union thing" a sensitive issue that "current owners have to address. It's not an issue that we are involved in."
Representatives from Club Resorts and its parent, ClubCorp International, were at The Homestead Friday. They are interviewing employees and assessing the facilities.
One Homestead worker was pleased that a Club Resorts representative listened to her concern about losing work hours to imported laborers from Jamaica and The Philippines. The alien laborers are guaranteed a certain amount of work as part of a federal program that allows them to come to the resort; when business is slow, the hours are given to the aliens, the local worker said.
She wouldn't allow her name to be used.
Pettus says many employees are scared.
"A lot of people feel threatened. They figure they will come out on the losing end of the stick no matter what," he said.
He said a union at The Homestead "was almost a guarantee" before the purchase offer from Club Resorts.
Ingalls said he and others with Virginia Hot Springs Inc., which owns The Homestead, tried to talk Club Resorts out of making union rejection a contingency in the agreement.
When he learned earlier this year that employees were discussing scheduling a union vote, he told them the timing was bad.
He said he told employees there was an August deadline to find investors for the resort and that a union vote in that period "would be abysmal."
The request for the union vote was filed in early June.
"If the union had withheld, I don't think Club Resorts would have made any kind of stipulation," Ingalls said.
He said he could understand the desire of Club Resorts officials to keep The Homestead non-union, especially since The Homestead "would be darn near their flagship."
Club Resorts' literature currently refers to Pinehurst near Raleigh, N.C., as its flagship property. It will be 100 years old in 1995 and its Pinehurst No. 2 golf course is to be the site of the 1999 U.S. Open.
The company also owns or operates Shanty Creek-Schuss Mountain at Bellaire in Northwest Michigan; Quail Hollow near Concord, Ohio; Shangri-La in Afton, Okla.; and Barton Creek near Austin, Texas.
Club Resorts is a subsidiary of Club Corporation International. It was founded in 1984 and owns or operates six resorts, including Pinehurst Resort and Country Club in Pinehurst, N.C.
by CNB