Hotel Employees and Restaurant Employees Union Releases Report Analyzing Hidden Risks of Proposed Baltimore Ritz-Carlton Project.

Business Editors

BALTIMORE--(BUSINESS WIRE)--Sept. 5, 2001

Today the Hotel Employees and Restaurant Employees International Union released a report analyzing the hidden risks of a proposed Ritz-Carlton hotel/condominium project being planned for Baltimore's Inner Harbor.

The proposed project being developed by New York-based L.I. Square Corp will have 225 hotel rooms and 97 condominiums at an estimated cost of over $155 million. If completed, the hotel and condominiums will be managed and operated through management contracts by Ritz-Carlton Company LLC, a subsidiary of Marriott International, Inc. (NYSE:MAR)

L.I. Square Corp. is currently seeking financing for the proposed Ritz-Carlton project. The report, intended for prospective investors, examines four principle risks of the project - the developer's troubling financial history, environmental issues, potential operator problems, and the threat of labor unrest -- to assist investors in their due diligence activities.

The risks detailed in the 7-page report include the following:

-- Philip Pilevsky, the principle owner of L.I. Square Corp., has a troubling
history of bankruptcies and foreclosures. Mr. Pilevsky's real estate
partnerships were involved in eight foreclosures and three bankruptcy filings
on various shopping centers in the early 1990s, and six foreclosures and nine
bankruptcy filings on non-retail properties.

-- There is a strong likelihood of major labor unrest at the project given the
fact that L.I. Square Corp. has not obtained labor peace agreements with the
building trades and service unions. Barring a labor peace agreement, those
unions have pledged to pursue all legal options to oppose the project,
including the use of pickets, strikes, boycotts, and other activities. The
risks of labor unrest at the project is heightened by the fact that the
operator of the hotel - Marriott International (NYSE:MAR), through its
subsiduary Ritz-Carlton - has a history of contentious labor relations.

-- According to a recent litigation, owners of a Ritz-Carlton in Puerto Rico
have raised allegations about the management practices of Ritz-Carlton. On
March 30, 2001, Green Isle Partners, Ltd., filed a complaint under the
Racketeering (RICO) Act seeking at least $420 million in damages, alleging that
Ritz-Carlton and Marriott International breached their management contracts and
fiduciary duty, falsified records and used kickback schemes to defraud Green
Isle Partners, Ltd. According to Green Isle, the company "has lost all
confidence in Ritz-Carlton's management of the hotel," and was recently forced
to file for bankruptcy as a result of its fight with Ritz-Carlton.

-- According to Disposal Safety Incorporated, a respected consulting firm which
specializes in third party review of groundwater and soil contamination
investigations, there is abundant evidence to warrant a thorough field
investigation to determine whether the proposed site for the Ritz-Carlton
project is free of environmental contamination. A thorough preliminary
assessment should be conducted to properly characterize the site to permit
assessment of the potential risks.

For more information or a copy of the report, please contact Nick Weiner at HERE Research, 202/661-3693 or at [e-mail].