Developers delivered a revised, scaled-back plan for the hotel last week. They say they believe they’ll get approval this time...
Is the project still dependent on a taxpayer funded parking deck?
“We’re very confident,” said Bridget Chisholm of Urban Hotel Group , which is developing the hotel with Randall Kaplan’s Elm Street Center group.
The bonds aren’t government money — local, state or federal — or even government-backed loans.
What are the Tax Credits?
If the debt to be sold and the Tax Credits are subsidized by the government,
is more tax revenue needed to account for the profits the project takes
from taxpaying businesses
that would have otherwise captured the business?
Instead, they’re basically IOUs issued by local government bond authorities.
If the bonds go bad, could it affect the City and County's credit rating
if poor oversight and due diligence is found?
Institutional investors — usually banks or mutual funds — buy them because the interest they yield is tax-exempt.
Is this sentence not flat out incorrect, if the end buyers of said "institutional" tax-exempt stuff
are almost always individuals looking for higher yields with less taxes?
Chisholm said her group chose to find a qualified institutional buyer for the bonds rather than provide a letter of credit from a bank, something the bond authority had asked about when last it reviewed the hotel project.
Can someone explain to the public how debt that was in need of a guarantor
suddenly does not need one?
“I’ve been in New York, we’ve been talking with potential bond buyers, and we have addressed the credit enhancements and things that we want,” Chisholm said.
Can someone explain to the public what "credit enhancements" means?
She said her group will be able to show that the 10-story luxury hotel could be a success at the corner of South Elm Street and February One Place, across from the International Civil Rights Center & Museum.
If the hotel is in part dependent on Civil Rights Museum Attendance,
how has the Museum performed relative to projections?
The new plan scaled back the number of rooms to 180 from 200. Chisholm said the revised project will make better use of the existing Empire and Regency Rooms, which now host conferences and social gatherings.
Have the new “hypothetical” assumptions been compared to the old?
.
Did the 23% increase of the 2012 Rev/PAR forcast relative to only 10% fewer rooms
occur within 3 months?
.
Doesn't that seem like an unusually large jump
in the space of a very short amount of time?
.“One of the strengths of the new proposal is that we really took a hard line and looked at the existing enterprise and the market and said with our partners: Let’s right-size this,” Chisholm said.
Where is the complete copy of the new opinion
that contradicts W&R Hospitality Services, Inc.’s January 18, 2010 opinion
to the City of Greensboro’s Andy Scott?
...If the project is approved by the county’s bond authority, the Guilford County Board of Commissioners will hold a public hearing on the project.
What is the deferred developer fee?
How much cash is being put up?
How can the raw land under a property that sold for $450,000 in 2002
be worth upwards of $4,000,000 in 2010?
Is Deena and her boyfriend still in on it?
...Chairman Melvin “Skip” Alston was a broker on the hotel deal in its early stages. Although his work with the project has ended, Alston said he will recuse himself from further board discussion of the hotel to avoid a conflict of interest.
How often do brokers get paid before the closing of a real estate deal?
Was Skip paid before or after the adoption of the Ethics Code?
If he was paid before the adoption of the Ethics Code,
was the payment accelerated on his behalf?
If it was accelerated,
should he be called on it by the Greensboro News and Record Editorial Board,
the Rhino, the Carolina Peacemaker and Yes Weekly?
Chisholm said developers are looking forward to Tuesday’s meeting and are eager for approval; the bond program expires Dec. 3.
“We wouldn’t have filed unless we were ready and knew we could get this across the finish line,” she said."
How did they file it last time?
Greensboro News & Record
George Hartzman
5 comments:
Qualified Institutional Buyer will be accepted in lieu of guaranty by bank.
http://www.nctreasurer.com/NR/rdonlyres/AC5CFAD6-3D89-4508-B366-1CC8D8A5CBF0/0/Memo201034.pdf
From the link above:
“Whether the proposed operator and obligor have demonstrated or can demonstrate the financial responsibility and capability to fulfill their obligations with respect to the financing agreement.
In making such determination, the Commission may consider the operator's experience and the obligor's ratio of current assets to current liabilities, net worth, earnings trends and coverage of fixed charges, the nature of the industry or business involved and its stability and any additional security such as credit enhancement, insurance, guaranties or property to be pledged to secure such bonds.” 159C-8(b)(1) and 159D-8(b)(1)
Historically, the LGC has found projects to meet this feasibility standard in one of the following ways:
1) The bonds have an investment grade rating (i.e., BBB or better) from at least one national rating agency;
2) The bonds are supported by a letter of credit from a bank or other financial institution that has an investment grade rating;
3) A bank, insurance company or “similar financial institution” commits to purchase and hold the bonds in a private placement transaction.
In order for entities to take full advantage of financing available through ARRA, the LGC will expand the definition of institutions that can purchase facility bonds to include Qualified Institutional Buyers (“QIBs”) as defined by Rule 144A of the Securities Act of 1933.
This temporary change in standard will apply only to the authorization of Recovery Zone Facility Bonds. In addition, the change only applies where the QIB agrees to limit the secondary market sale of the facility bonds to banks, insurance companies, other QIBs and similar financial institutions."
If "other QIBs" means they can sell them to someone else to sell, and they find some one to sell them, they might have a shot at getting the financing, all things being equal.
George Hartzman
Good factoid.
I wonder if Weaver and Quantence dropped thier suit before and/or were unaware of the changes on May 17, 2010.
And the plot thickens.
This is great fun.....
"Where is the complete copy of the new opinion
that contradicts W&R Hospitality Services, Inc.’s January 18, 2010 opinion
to the City of Greensboro’s Andy Scott?"
Stop making sense, George!
You know the Business As Usual crowd doesn't allow that sort of thing when it comes to running the show.
Here is what some of the lawyers on the county end say about the risk to the county:
http://www.news-record.com/content/2010/01/25/article/federal_bonds_a_new_critter_lawyers_say
As to whether the bond authority will accept anything less than a letter of credit from a bank - we're going to find out today beginning at 4 p.m. in the Blue Room of the Old County Courthouse.
If they do, will the state committee? Again, we'll have to wait and see if it gets that far.
The developers are betting the "private placement transaction" will, as you said in a comment here, be enough.
I don't think the developers are suggesting that the hotel is dependent on Civil Rights Museum traffic, they just think the spot downtown is a good one and the Civil Rights Museum was used in the story as a landmark for readers, to help them imagine where it would be in relation to things they may know.
Even if Alston was paid after the ethics rules went into effect, he would not have violated any of them. Had the actual vote taken place before the ethics rules were in effect he would have had to disclose fully the nature of his conflict, whether or not he'd been paid or when he'd taken payment.
But even if they had been in place then and he hadn't fully disclosed his conflict, the only thing he could have faced is censure, at the discretion of the board itself. The censure comes with no actual weight or tangible punishment.
Deena Hayes and her partner are still part of the deal so far as the Ole Asheboro neighborhood association still has an equity share in the hotel and, at last check, his construction company is still listed as part of Urban Hotel Group.
How much Alston made, how much of a development fee is being deferred, how much everyone stands to make, how much that equity share from the Ole Asheboro neighborhood is actually worth in dollars...these are questions that have been asked but not answered. The bond authority may ask them again today and in some cases may be able to compel and answer.
But I wouldn't bet on it.
hope to hear a good story in paper on this tomorrow
Post a Comment