Historic Restoration Inc. still plans to inject $2.2 million into downtown St. Louis’ Renaissance Hotel to prevent a debt default, but the plan has changed slightly. HRI’s Tom Leonhard told bondholders yesterday that a deal is still being negotiated and will not close by Friday, as originally envisioned.

Leonhard spoke with bondholders by conference call. According to a summary posted by UMB Bank, the bond trustee, the deal has changed in a couple of ways:

• Instead of HRI putting up the $2.2 million necessary to make a June 15 interest payment, the money now will be advanced by a Kimberly-Clark subsidiary that is the hotel’s majority owner. HRI will reimburse Kimberly-Clark later.
• HRI does not expect to take over Kimberly-Clark’s ownership interest. Marriott, which has veto power over such things, apparently objected to the ownership transfer.

 Also on the conference call, hotel manager Robert Bray said the outlook for the next 12 months is mixed. The trustee’s summary says:

Mr. Bray responded that the hotels expect to generate just enough cash to make the December 15, 2008, payment. There will likely be a shortfall for the June 15, 2009, interest payment, comparable to this June’s shortfall of $2.2 million.

Bray said the hotel’s occupancy is projected at 63.0 percent this year, down from 64.8 percent last year. Its average room rate will rise slightly, to $125.42 from $123.79. Here’s an interesting excerpt from Bray’s “talking points”:

While many markets across the ountry continue to enjoy more substantial rate growth, we continue to get push-back from not only groups; but, local corporations who will not consider a more aggressive rate position/strategy for St. Louis.

In 2009, Bray noted, the hotel will benefit from NCAA wrestling and women’s basketball tournaments and the Major League Baseball all-star game. But, he said, the hotel has just 94,209 group rooms booked for next year. That’s a drop of 11,000 from the 2008 bookings it had at this time a year ago. 

As I said in a recent column, this may not be the final step in rescuing the Renaissance. Other measures, such as a debt refinancing, may still be needed.