03/11/2015 - City Council Finance CommitteeFINANCE COMMITTEE MEETING
WEDNESDAY, MARCH 11, 2015
11:00 A.M.
CONFERENCE ROOMS 2 A &B
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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.
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Information to be provided at meeting