As of now, the guaranteed maximum price has not been delivered, the $100 million loan has not been secured, and the bonds have not yet gone to market.
"With deals like this, you have different sources of funding. Here, I think I've counted seven," Burke said. "There will be multiple closings, but because of the complexity, one won't close without the others being assured (through escrow or simultaneous closing). It's a lot of coordination, a lot of moving parts."
Burke said the developers are getting "some good reviews on the bonds." But the hotel bonds will be unrated — meaning they won't be assessed by a credit rating agency such as Moody's or Standard & Poor's — largely because their repayment will not be guaranteed by the city or other public entity.
They also will be nonrecourse bonds, meaning the hotel's owners won't be on the hook for repayment, either. It is "predicated on the success of the hotel," Burke said.
The information included a report from Chicago-based consulting firm HVS, which projected that the new Hyatt's occupancy rate would rise from 62 percent upon opening to 68 percent in 2026 and that the average daily room rate would rise from $163 to $214 during that span.
hartliss wrote:Will be interesting to see how this plays out. It seems like the bonds being "unrated" doesn't bode well if you are invested in this project...
I imagine that makes them more something a place that can send lawyers to gather information would buy.
I thought all this was taken care of and was a reason why the judge ruled against the petitioners. The City came out claiming all these contracts had been signed, hence the project should move forward. Now it sounds like they didn't have all their ducks in a row, like they claimed.
KC_JAYHAWK wrote:I thought all this was taken care of and was a reason why the judge ruled against the petitioners. The City came out claiming all these contracts had been signed, hence the project should move forward. Now it sounds like they didn't have all their ducks in a row, like they claimed.
Notice they didn't say that the project is shovel ready. Just that they had a deal to build.
This implies that the contracts you refer to are that this developer has a legal right to the land, the plans are approved with the city, etc. It doesn't immediately mean contracts are signed with a bank.
The lack of government collateral backing the debt doubtless means they're working harder to find investors that will put up millions of dollars at an acceptable rate. That takes time.
I suspect the recent boom in smaller hotels in DT KC could also hamper financing. Is DT overbuilt respect to hotel space? We will soon find out.
It would certainly help if more of KC's business community was located downtown. Business is what fuels the hotel industry on a regular basis in most US cities.
Convention planners have said for a long-time that downtown KC was under-served in hotel rooms close to the convention center--as compared to competitor cities.
The City has to be careful though about adding new subsidized hotel rooms that will compete with other already subsidized hotels like the President Hotel and others that are already operating. Will a new Hyatt reduce room nights at the President? I guess we will find out.
I agree that the market would be vastly improved if more of our local business community was located downtown. If Cerner and Sprint had at least one executive office tower, and say Farmers Insurance, Farmland Foods, Black & Veatch, Garmin, YRC Worldwide, Westar Energy, AMC, Applebees, Dairy Farmers of America, BATS, Black & McDonnell, Burns & McDonnell, Citibank, HCA, Freightquote, Mariner Holdings, Lockton, Milbank, Polsinelli, Milbank, Travelers Group, Midland Loan, and Waddell & Reed were all downtown, then there would be more business people traveling here and needing a room downtown.
I don't know which local businesses pull in the most business visitors. Some probably more than others.
I know in the olden days, TWA pulled in a lot of company personnel that stayed downtown.
Is there anything we can do to persuade companies to come back downtown? Do you think revitalization will help lure them back?
FangKC wrote:Convention planners have said for a long-time that downtown KC was under-served in hotel rooms close to the convention center--as compared to competitor cities.
The City has to be careful though about adding new subsidized hotel rooms that will compete with other already subsidized hotels like the President Hotel and others that are already operating. Will a new Hyatt reduce room nights at the President? I guess we will find out.
I agree that the market would be vastly improved if more of our local business community was located downtown. If Cerner and Sprint had at least one executive office tower, and say Farmers Insurance, Farmland Foods, Black & Veatch, Garmin, YRC Worldwide, Westar Energy, AMC, Applebees, Dairy Farmers of America, BATS, Black & McDonnell, Burns & McDonnell, Citibank, HCA, Freightquote, Mariner Holdings, Lockton, Milbank, Polsinelli, Milbank, Travelers Group, Midland Loan, and Waddell & Reed were all downtown, then there would be more business people traveling here and needing a room downtown.
I don't know which local businesses pull in the most business visitors. Some probably more than others.
I know in the olden days, TWA pulled in a lot of company personnel that stayed downtown.
