45 replies to this topic

[Sparkleman]

Once GDJ sold out to Blackstone, the first thing the new CEO (one Gary Delapp) was get rid of all the top people GDJ had hired. They brough in a bunch of execs from another hotel company called Homestead (ironically this is what ESH is being rebranded as) and most of them were forced to move here from Florida. Thats one of the things that Delapp hated the most and said that if he ever got the chance to move the company, he would. When Blackstone sold the company off to Lightstone, the economy had just begun to head for the crapper although most folks were unaware. Lightstone and probably most of Wall St. thought the party would go on forever, but Blackstone is far smarter than most. Anyway to make a long story short, once Lightstone went into bankruptcy (where ESH sat for the better part of 18 months), Delapp installed a contingency into the bankruptcy plan that anyone who bought the company would have to agree to move the HQ's. So when Centerbridge/Paulson bought it, Delapp was going to get what he wanted and he did. Of course they gave the paper that ridiculous story about needing to be closer to an airport (Charlotte-Douglas) that had direct flights to many major cities. What is really came down to was everyone that came here from other cities and had to live here hated Spartanburg, but they all had to live here if they wanted to keep their jobs and their 6 figure salaries. They all bought houses in 2004 and never had a chance to get out until the company finally went bankrupt. As an aside, ESH is a cash cow but since it had been bought and sold a couple of times over the last 6 years they simply could not service their massive interest debt.

Fast forward to 2011 and the company does indeed make the move in the fall. Delapp says IT and accounting will stay in Spartanburg, but that was never part of the plan as he wanted to move it all and was just giving that story to pacify Spartanburg leaders. He wanted everything to be under his thumb in Charlotte like it was here, but the new company realized what a horrible CEO he actually is and gave him the boot 2 months ago.

A lot of the Delapp hatred for Spartanburg came from the fact that he felt the city never accepted him and looked up to him like they did GDJ. I don't think he actually realized what all GDJ has done for this town vs what he did which was nothing. He resented GDJ from the day he got here and when no one in the towned bowed down to him, he made plans to get out when he could. Unfortunately for him it took another 6 years to get out and then he got fired. Don't feel bad for him as like all fired CEO's he walked away with millions. Its too bad he still can't move the house out at Carolina Country Club. I think he also figured that everybody would be all in and not be able to wait to get to Charlotte which most definately was not the case as many refused to go including several key folks that he tried to "buy" in order to go.

In a nutshell it didn't have to happen and it has cost the company millions to make the move and much more with starting salaries for new employees up there being 30-35% higher than what ESH paid 70 miles down the road. A funny thing came up not too long ago in conversation among ESH employees that had Delapp moved to Greenville, no one would have said a word and everyone would have gone.

[spartanburgh]

Thanks for the explanation Sparkleman! I suspected it would be something along those lines, but its nice to know for sure that there were no screw ups with the local politicians.

[Sparkleman]

The local politicians were totally unaware what was going on. Once GDJ sold out and all his execs were shown the door, there were very few (almost none) that knew what was going on. When the move was announced internally, it was leaked to GDJ by a former lieutenant that had been kept and had slowly risen into some power to know what was going on. GDJ called Blackstone (as they still own a minority stake) and Delapp to voice his opinion that it was a bad move. Delapp blew him off figuring this would be the only time he would get a chance to get the better of him. Funny how the joke ended up on Delapp and that GDJ got the building back which Delapp initially said he'd never sell back to GDJ. Thats a whole other story and a hilarious one at that.

If you are familiar with "The Young & the Restless" soup opera (we watched it in college), its basically Jack Abbot (Delapp) vs Victor Newman (GDJ) with Newman winning the majority of times and ever time there was a lot on the line.

[roads-scholar]

Sparkleman, on 03 May 2012 - 02:05 PM, said:

The local politicians were totally unaware what was going on. Once GDJ sold out and all his execs were shown the door, there were very few (almost none) that knew what was going on. When the move was announced internally, it was leaked to GDJ by a former lieutenant that had been kept and had slowly risen into some power to know what was going on. GDJ called Blackstone (as they still own a minority stake) and Delapp to voice his opinion that it was a bad move. Delapp blew him off figuring this would be the only time he would get a chance to get the better of him. Funny how the joke ended up on Delapp and that GDJ got the building back which Delapp initially said he'd never sell back to GDJ. Thats a whole other story and a hilarious one at that.

If you are familiar with "The Young & the Restless" soup opera (we watched it in college), its basically Jack Abbot (Delapp) vs Victor Newman (GDJ) with Newman winning the majority of times and ever time there was a lot on the line.

Personally I'm glad they've packed up and hit the road.  This company is completely mucked up.  Good riddance!  Charlotte has picked up two companies recently who relocated from other cities - ESH from Spartanburg and Chiquita Banana from Cincinnati.  Both companies are headed for the crapper thanks to poor management.  I would be surprised if these companies are around in five years.

[clemsonfn]

I was an employee for ESA (later ESH) from September 2002 to November 2004. It was my first job out of college.

The Blackstone acquisition went down May or June of 2004. The legacy employees noticed an immediate culture change with the influx of Homestead executives. Several were witnessed removing wedding rings before hitting the town at a sales meeting in Atlanta. One walked into a executive meeting and announced (to cheers) that Hurricane Ivan was hitting Texas, which meant that thousands of displaced people would need hotel rooms.

I couldn't get out of there fast enough.

[Sparkleman]

Above is indeed the truth as I heard that as well.

However what roads said is inaccurate. ESH is starting to hit its stride as several highly respected execs have joined the team and several valuable members of the old regime are still around. The guy that turned around Holiday Inn and Holiday Inn Express is the new CMO. There's no way he'd have taken the job and risk staining his legacy if he thought ESH was headed for the crapper. All the hotels are being renovated and will soon be known as Homestead brand hotels. They'll be nicer as they are catering to a different crowd now. As I mentioned above, ESH is a cash cow. You can bet when they go public again (very soon), they'll be a very attractive stock.