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03/11/2015 - City Council Finance CommitteeFINANCE COMMITTEE MEETING WEDNESDAY, MARCH 11, 2015 11:00 A.M. CONFERENCE ROOMS 2 A &B FiTha►UL1 1! e[h4►U.1e10Z9]21 If] ►I II. CEDAR GROVE HOTEL PROJECT UPDATE III. OTHER BUSINESS IV. ADJOURNMENT Agenda Information Memo March 11, 2015 Finance Committee Meeting II. Cedar Grove Hotel Project Update Direction To Be Considered: To receive an update on the status of the Morrissey Hotel Group property sale and provide direction to staff regarding next steps in that regard. Facts, ➢ On February 18, 2014, the EDA approved the purchase agreement with MHC Cedar Grove LLC (Morrissey Hospitality) to sell an approximately one acre parcel between Cedar Grove Parkway and the parking garage to the company for the construction of a Hilton Home2 hotel, with closing anticipated by August 31, 2014. ➢ In July, the developers indicated that they could not come to terms with an institutional equity partner and would need to go back to the market for investors. In order to permit the firm additional time for that purpose, the EDA approved an extension of the time to close to October 31, 2014. ➢ In early October, the developer indicated that roughly 50% of the equity had been secured, but that an additional extension would be necessary to secure the remainder. They are requesting a new closing date of February 28, 2015, with the intent to commence construction in the spring. In November, the EDA approved that extension. ➢ Along with the November extension, the developers requested and the EDA approved some revised terms to help them with cost containment issues. With those considerations, the developer indicated they would be able to proceed to secure the remaining capital and close in February and break ground in the spring. ➢ In mid - February, the developer contacted staff indicating they have sufficient funds to close on the property purchase, but had not secured the capital to proceed with construction. Staff also learned that the developer had not taken steps to permit the property closing to occur by February 28, but that they would authorize their attorney to begin work in that direction. Staff advised them that the City Attorney would work with them in that regard, but that it was also necessary to advise the Finance Committee of the status and request direction for next steps. Attachments: (0) Information to be provided at meeting