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THE GREENBRIER RESORT PAYS MARRIOTT $7.5 MILLION BREAKUP FEE 'MONSTROUS AMOUNT' COMES AFTER FAILURE TO REACH MARKETING DEAL


Publication: THE CHARLESTON GAZETTE
Published: Saturday, August 01, 2009
Page: 1A
Byline: ERIC EYRE STAFF WRITER


The Greenbrier resort paid Marriott International a $7.5 million breakup fee Friday, after the two sides were unable to work out a marketing deal, the resort's new owner said.


"Even though it's a monstrous amount of money, it's a sound decision, and it's the right decision," said Jim Justice, who purchased The Greenbrier for $20.1 million last spring. "Now, we move on."


In May, Justice and Marriott reached a tentative agreement for the hotel giant to market The Greenbrier in exchange for a fee for each guest Marriott booked. The tentative deal required Justice to pay the breakup fee if a marketing contract wasn't finalized by Friday night.


Justice said he worried that the marketing arrangement with Marriott would cause confusion among travelers interested in staying at the world-famous resort.


"This treasure, this icon, needs to be marketed solely as The Greenbrier," Justice said. "If you have a sales team from the Marriott and a sales team from The Greenbrier, then you develop the possibility of confusion with the customer base."


Justice said Marriott negotiated the marketing proposal in good faith, and that he holds no animosity against the hotel chain.


"They were good to work with, but you reach a point in time where you either fish or cut bait," he said. "Under the circumstances, it made more sense for me to write the check."


Justice said he immediately wired $7.5 million to Marriott after realizing a final agreement couldn't be worked out.


"We broke ways today, but on a really good note," he said. "We now have control of everything."


Justice bought The Greenbrier from Jacksonville-based transportation company CSX Corp. in May, rescuing the resort from bankruptcy. At the time, Marriott questioned the sale, saying it had a contract to buy the resort.


Marriott later withdrew its opposition after reaching the tentative marketing deal with Justice.


"We enjoyed getting to know and working with the ownership team at The Greenbrier," said Rich Hoffman, Marriott's executive vice president for mergers, acquisitions and business development. "We wish them the best of success with a unique and exceptional property. We parted company as friends and with a great deal of respect for Jim Justice and his team."


Also Friday, Justice announced that he has hired a new vice president of sales and marketing at The Greenbrier.


Jeff Kemic, who held a similar post at The Sawgrass Golf Resort & Spa in Florida, starts Monday. The Sawgrass resort, home of The Players Championship PGA golf tournament, is operated by Marriott.


The Greenbrier has been rumored to be in the running for a PGA tournament event. PGA Tour officials have made several trips to the resort in recent weeks. Justice said he hopes to have an announcement about the PGA's interest next week.


Earlier this month, Justice spent $14 million to end The Greenbrier Sporting Club's partnership with Dolan, Pollak & Schram Development Co., a real estate firm based in Savannah, Ga. The Sporting Club is a luxury home development in White Sulphur Springs.


Justice previously announced plans to build a $25 million underground casino and entertainment center at The Greenbrier. Greenbrier voters approved casino-style gambling at the resort in November.


The casino is expected to open April 1. Meanwhile, the resort plans to offer gambling on a small scale, starting in October.


Last week, Justice announced that an upscale steakhouse named after NBA Hall of Famer and Kanawha County native Jerry West will open at The Greenbrier on Oct. 1. Justice and West are friends.


Justice believes the changes will help return the resort to its former glory and restore its five-star Mobil Travel Guide rating. The resort lost its fifth star in 2000.


"I'm so confident in the direction we're going and making this place the best resort in the world," Justice said. "This thing is taking off like a rocket ship right now. We're going to ride it all the way to the moon."

Lawrence Pierce/Gazette file photo
New owner Jim Justice wants to restore the coveted Mobile fifth star to The Greenbrier and lure the PGA Tour to the hotel.

Reach Eric Eyre at ericeyre@wvgazette.com or 304-348-4869.

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