Financing delays building of Hyatt Hotel

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Developers for the proposed Hyatt Hotel have not given up hope for their Reynolds Street project despite being four months behind on breaking ground.

The Hyatt Place Hotel planned for the corner of Reynolds and Ninth streets is to have 139 rooms and will employ 70 people.   Special
Special
The Hyatt Place Hotel planned for the corner of Reynolds and Ninth streets is to have 139 rooms and will employ 70 people.

"In today's economic climate, it's just really hard to get hotel financing," said Cortland Dusseau, a managing partner for Legacy Hospitality LLC. "It's just a matter of time."

Although the project was set to launch in June after the TEE center construction began, plans changed when banks closed their fists and obtaining loans for the hotel project became a bigger hurdle than expected.

Receiving financing for the $25 million project is the only variable preventing workers from breaking ground, Dusseau said.

Until then, workers cannot begin to demolish the old city police department that sits on the site of the proposed hotel at the Ninth and Reynolds street intersection with the trade, exhibit and event center and its parking lot.

Developers have said 60 percent of the project's funding will come from bank loans. The rest will come from Legacy Hospitality's own capital and a federal tax credit through the U.S. Treasury Department.

Despite the delay, Dusseau said he is confident in the integrity of the project and the appeal for downtown Augusta.

The proposed eight-story, 139-room hotel is expected to take about a year to construct. It would employ 70 people.

Hotels nationwide are at 58.8 percent occupancies -- a 2.8 percent increase from this time last year, according to Smith Travel Research. In Atlanta, one of the top 25 travel markets, hotel occupancies jumped from 53.6 percent in 2009 to 58.8 percent this year.

With a hopeful eye for the hotel industry, Dusseau said everything is waiting on the banks.

"We're more optimistic than we have been," he said. "It's just very frustrating."

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Southern_Patriot
0
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Southern_Patriot 10/05/10 - 10:57 pm
0
0
they had better hurry up

they had better hurry up because marion williams will be elected and they won't be able to break ground until somebody builds him a drag strip

Emerydan
10
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Emerydan 10/06/10 - 12:27 am
0
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And weren't we told this was

And weren't we told this was the main reason to approve the TEE give-away? "If we don't act soon...we'll lose this hotel." I am afraid my suspicion was true all along... there never WAS a hotel deal.. it was a PR ruse to get the TEE approved. But why are they having such a tough time with financing.. I mean this TEE was supposed to be a sure bet, right? Well I'll let Riverman take over from here as he has researched this more than just about anyone else who blogs here.

Riverman1
86983
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Riverman1 10/06/10 - 10:07 am
0
0
Actually, Emery, this one is

Actually, Emery, this one is yours. You called it from the beginning. In the meantime beautiful hotels are being built in the Wash. Rd.-Stevens Creek Rd area without a penny of the lost $100 million.

By the way, a year ago we were also told the sale of Ft. Discovery was imminent so it couldn't have been remodeled for use as a TEE.

corgimom
34079
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corgimom 10/06/10 - 10:14 am
0
0
They won't finance it because

They won't finance it because they know it won't be profitable.

corgimom
34079
Points
corgimom 10/06/10 - 10:15 am
0
0
Ok, here's the next step.

Ok, here's the next step.

"If A-RC doesn't loan us the money, we'll lose the tax credit and it won't be built. A bank won't finance us, so A-RC needs to."

omnomnom
3964
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omnomnom 10/06/10 - 10:50 am
0
0
well, dang.

well, dang.

Emerydan
10
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Emerydan 10/06/10 - 11:13 am
0
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This deserves an indepth

This deserves an indepth investigation, because none of this smells right. remember back a year ago when the whole TEE saga was going on and Julian Osbon was writing letters to the editor claiming that if the TEE was not approved Augusta would lose this hotel.. that it was adone deal and all that was needed was approval of TEE? Remember how members of the CVB and other proponents of The TEE went before The commission and said teh TEE must be approved or it would lose a new hotel and 70 jobs. This hotel became the main reason for approving the TEE.. but now we find out there never was a deal.. heck no financing even in place. I said that iof the commissioners were going to approve nearly tripling the amount for the TEE center based on thsi hotel promise, that they should have something in writing from this group and see that they have a financing plan.. I beleive this was nothing but a ruse from the outset to get the TEE passed.. remember the deadlines imposed by Mr Osbon?

countyman
20607
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countyman 10/06/10 - 11:30 am
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The hotel is still a go. Mr

The hotel is still a go. Mr Dusseau wouldn't have cared if the Tee Center got built or not if he wasn't building a hotel. The feasibility study for the hotel is already completed. Alot of developers are having trouble getting financing at the moment.
http://www.interimhospitality.com/pdf/Latest/3IHCClientList.pdf

Their are no new hotels under construction on Stevens Creek road. The Holiday Inn opens next month and is basically complete. The Sheraton opened in December 2009.

The Hyatt downtown is more expensive than the Sheraton and definitely more costly compared to the Holiday Inn Express.

Emerydan
10
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Emerydan 10/06/10 - 11:33 am
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countyman.. get a grip.. were

countyman.. get a grip.. were you living under a rock all of last fall when this was going on? Did you miss Osbon's incessant whining in several AC LTEs about Augusta losing this great "gift" if the TEE was not approved. Do you not remember the artificial deadline imposed on commissioners by Mr Osbon and Mr Dusseau, that if the TEE Center was not approved then the hotel was off? Seems to me if you are going to make those kinds of threats, you better be able to produce.. it turns out this guy has no financing for this project.. I could go down and tell the commissioners I'm going to build a 100 acre theme park.. but if I'm going to start making demands like these guys did, then I better be able to produce something.. at the very least prove that I have the financing lined up. What is really galling is that Mr Osbon and Dusseau made these threats and imposed a dealine.. yet here they are a year later and NO groundbreaking on their hotel and with no financing plan in place, there may never be a hotel... that;s what many of us were saying all along.. but many commissioners voted for the TEE give-away because they thought that by doing so, downtown would get a new hotel and 70 jobs. I believe those commissioners were misled. I predicted this last year.. I told you guys that just wait.. these hotel guys are going to keep pushing back the groundbreaking and then say that in this economic climate, they are having trouble securing financing.. moire months will go back.. the TEE will open for business, and no hotel will have ever been built.

floridasun
310
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floridasun 10/06/10 - 11:37 am
0
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Gee, a lot of your keyboard

Gee, a lot of your keyboard crusaders really need to take a look at the real financial world. All real estate developments are having a hard time getting financing. Banks simply will not lend money on major commercial real estate projects at this time whether in Augusta, Atlanta or anywhere else. This is one of the problems with the economy. Banks need to lend money to viable developments to get the economy going again.
The hotels on Washington Rd at Stevens Creek Rd got their loans before the economy crashed. By the way the overbuilt Washington Rd/I-20 hotel strip is a great example of poor city planning. This area will be a slum within 10 years...too many hotels jammed in next to each other. The Hyatt Place proposed downtown will be something different,located on the Augusta Common and near the Riverwalk. It may not be for everyone but its will be a nice alternative to the strip mentality of Washington Rd/I-20.

countyman
20607
Points
countyman 10/06/10 - 12:06 pm
0
0
Emerydan..... Mr. Dusseau

Emerydan..... Mr. Dusseau already spend his own money on the feasibility study for the Hyatt..

The Tee Center didn't break ground in June. The Tee Center didn't start construction until the end of July.

The Hyatt Place is atleast a three star hotel... Of course the hotels in the $5-$10 million range. Similar to the new Hampton Inn under construction on Gordon Hwy have a easier job breaking ground.

augusta citizen
9692
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augusta citizen 10/06/10 - 04:18 pm
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It is true that financing is

It is true that financing is harder to come by these days, anyone who reads and watches the news knows that. Emerydan did discuss this though and warned that without contracts in writing it could fall through. I guess I figure it's a fifty-fifty chance it could go either way at this point.

Riverman also has a point, it was strongly asserted that there was a buyer for Ft. Discovery that would be announced shortly. Apparently there wasn't.

calculator25
0
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calculator25 10/06/10 - 04:35 pm
0
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Emerydan you are always right

Emerydan you are always right on target. We were absolutely led to believe that it was the main reason to approve the TEE give-away and give-away is exactly what it is. Whoever heard of a public-private partnership that had the public sector giving a private for profit corporation such a generous gift and then paying them to manage it?
Isn't that like paying the fox to watch the hen house? Isn't it enough that the Marriot and its owners get a 45 million dollar gift from the taxpayers but that they also arrange to have themselves paid close to a quarter of a million dollars a year to manage their own facility?
Who could possibly benefit from this arrangement but the privately owned for profit (and they make plenty of profits) corporation and its shareholders. You can be sure the taxpayers will never see any return on their generous gift. Just think of all the other projects that might have benefitted this community with that 45 million dollars - that could have really gone far to revitalize the downtown and Laney-Walker areas and attracted real investors to our decaying downtown.
The TEE Center will only benefit the shareholders of the corporation that owns the Marriott. It was a done deal from day one and they used every technique and tactic to push this past our dumbbell commissioners who are clueless!

thewiz0oz
9
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thewiz0oz 10/06/10 - 04:37 pm
0
0
Sorry fellas -- I’m back --

Sorry fellas -- I’m back -- the facts: Building of the new Hyatt in downtown required four things to happen --1) construction money in place -- done; 2) approval of the TEE Center -- done;3) approval of the Downtown Development Authority to finance a parking deck as part of the hotel -- done; 4) $11M in bank financing to complete the project--not done. .The banks would not commit until the other three were completed. A year ago the bank financing was not a problem -- with tax credit the bank financing was at about a 50% loan to equity. Today with Obama micromanaging the banks lending institutions are unsure of the future & holding onto their money--most banks have more cash than normal. The logjam will break & the bank financing, the easiest of the four objectives to mee, will happent. Emerydan--get your straw hat and chocolate martini ready -- soon you’ll be able to enjoy the view of the Riverfront from the ‘Critic’s Longue’ atop the new Hyatt.

countyman
20607
Points
countyman 10/06/10 - 05:28 pm
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0
The Tee Center was approved

The Tee Center was approved by the voters in RC. The parking deck with 1st floor commercial and retail space is under construction. Cal Ripken and Jim Jacoby(developer of Atlantic Station) both want to invest millions of dollars downtown. The two developers are about as real as you can get. There are several other developers who have already built/renovated or are about to build something new. The two Holiday Inn Express hotels is a perfect example. One at the entrance of Olde Town & the other in the Medical District off Old Ballie street.

Recently GA DOT decided to repave Reynolds street. Because you can't have all those new buildings along a raggedy road.

a different drum
26
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a different drum 10/06/10 - 05:22 pm
0
0
I think it is a waste of

I think it is a waste of money.

countyman
20607
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countyman 10/06/10 - 05:30 pm
0
0
Well since you live in

Well since you live in Columbia County you don't have to worry about the money or the created revenue coming to RC in the future.

AugustaVoter
2
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AugustaVoter 10/06/10 - 05:33 pm
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0
As a famous actor on a TV

As a famous actor on a TV show would say: "surprise, surprise, surprise!". Anyone in Augusta who didn't see this coming is naive or stupid. If they go through the pomp and circumstance to announce a project in Disgusta, it will fall through and never be built. It is the non-announced stuff, like the new hotels on Washington Rd and Gordon Hwy, that just get built before we hear about it. Like Nike says, "Just do it" and shut up.

AugustaVoter
2
Points
AugustaVoter 10/06/10 - 05:36 pm
0
0
The Villages at Riverwatch,

The Villages at Riverwatch, Bass Pro Shops, that thing at the old railroad depot on Reynolds, the Hotel at 444 Broad Street, and now this hotel. All never built.

calculator25
0
Points
calculator25 10/06/10 - 06:06 pm
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0
The TEE Center is a great

The TEE Center is a great deal for the owners of the Marriott and the owner of the property where the proposed Hyatt Place would be built. Osbon (aka thewizOoz) bought that property for next to nothing because it was adjacent to what was to become the Augusta Commons and he had advance knowledge of the Commons. Now he has been pushing the TEE Center so that he can sell his property to the proposed Hyatt Place Hotel. He only cares about profit for himself. He is so intent on defending the TEE Center arrangement because he stands to personally benefit.
It's not so much the creation of a TEE Center as it is the financing arrangement that smells so bad. If the TEE Center is being built on private property and is ATTACHED to a private entity then the entity that stands to benefit should be shouldering a much higher percentage of its costs. Does everyone understand this important point - it's not the TEE Center that is wrong...it is the way the taxpayer is footing 100% of the bill for its construction while the Marriott stands to collect 100% of the profits it will generate for the Marriott's business. The taxpayers will be on the hook for any losses but will not have the benefit to participate in the profits (through increased occupancy and room rates) that the privately owned Marriott will enjoy. Taxpayers foot the bill for the construction, owners of Marriott enjoy the benefit of the city owned TEE Center attached to the existing Marriott building, owners of Marriott get paid to manage their $45 million gift, taxpayers foot the bill if the TEE Center doesn't make enough to cover its operating expenses!
What a deal....and then we are rushed into the decision because we might loose the wonderful and unfunded Hyatt Place Hotel to be built on the property owned by Osbon. Is there a special reason Osbon has been such a cheerleader for the TEE Center other than pure self interest?

countyman
20607
Points
countyman 10/06/10 - 07:01 pm
0
0
Augusta is still listed as a

Augusta is still listed as a future store on the Bass Pro website. The Village at Riverwatch will be developed in the future.
http://www.basspro.com/webapp/wcs/stores/servlet/CFPageC?appID=94&storeI...

The Holiday Inn Express at 444 Broad street hasn't started construction yet. I don't remember the developer giving a exact timetable for groundbreaking.

The promenade(Apple, PF Changs, Chop House, Barnes & Nobles) at Augusta Mall was announced, and it was built shortly after.

Carmax was announced, and it's now open for business.

Sutherland Mill was announced, and now it's medical condos.

While the economy has delayed several projects in Augusta and alot of other cities. I still can go on and on with developments who have been completed.

countyman
20607
Points
countyman 10/06/10 - 06:59 pm
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0
If projects like Village at

If projects like Village at Riverwatch started construction before the recession. The lifestyle center would already be open.

AugustaVoter
2
Points
AugustaVoter 10/06/10 - 07:06 pm
0
0
What you don't say Countyman

What you don't say Countyman is that Carmax was indeed built and not used for 9 months. The Augusta Mall expansion was completed, yes, but still has empty spaces in it on the lower level and the owners are bankrupt. The hotel on Broad Street has been announced just like this was and the Villages. But no groundbreaking has occurred really at any of these sites. So your point is? I have not heard of the Mill location, which is probably why it was built completely. We ALWAYS hear about these projects and most never get completed and several don't get off the ground, literally. This announcement does not surprise me in the least bit.

countyman
20607
Points
countyman 10/06/10 - 07:14 pm
0
0
Crane Creek and the 25 acre

Crane Creek and the 25 acre shopping center on Jimmie Dyess were announced. Blanchard and Calhoun brought the CC property. I'm not sure it they still own the land. But their plans included a 75,000-square-foot retail development fronting Walton Way Extension with a 330-unit apartment complex behind it. 1 to 3 bedrooms ranging in rents between 1,100 and 1,300 per month... Crane Creek is clearing land as we speak, it's located off I-20/Walton Way Ext. The area is zone B-2.

The 25 acre shopping center on Jimmie Dyess was recently announced. Look for construction to start in the next couple of months.

countyman
20607
Points
countyman 10/06/10 - 07:30 pm
0
0
The owners of Augusta

The owners of Augusta mall(General Growth) filed for bankruptcy in 2009 and are no longer. What does this have to do with anything? General Growth owns hundreds of malls across the united states. Including the top malls in the state of Georgia(Lenox, Phipps, Permieter, Northpoint, etc).

I can only think of one empty space in the Augusta mall promenade. The space near Picture Innovations. As of June 2010 Augusta mall was at 95% percent occupancy compared to the average of 92% nationwide.

CCS, Handpicked(in the promenade), & Toys R US Express have all opened since then. The two level Forever 21 opened just before those stores did. Downtown Locker Room is almost complete and about to open shortly. Pandora, Great Wraps, Moes, and Icing are still coming to the mall.

The $20 million Sheraton on Stevens Creek was announced too. Some people might didn't hear about it, but it was definitely announced to the public.

Riverman1
86983
Points
Riverman1 10/06/10 - 10:31 pm
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TheWizOz seems to have lots

TheWizOz seems to have lots of answers. Why didn't the reporter just go to him when she wrote the story so we could hear first hand what those behind the project have to say? I'd like the next story to interview those involved and let's begin to peel this onion.

Oz says don't worry, soon as the banks start lending again, it's coming. But all that's saying is we never had an agreement for the hotel. Emery is right, there was one deadline after another thrown up as a reason the TEE had to be approved.

tckr1983
360
Points
tckr1983 10/06/10 - 11:55 pm
0
0
If you people think that

If you people think that Augusta is the ONLY city in America where projects/developments are announced and delayed/not built... Yea... keep thinking that.

Patience anyone?

Emerydan
10
Points
Emerydan 10/07/10 - 12:12 am
0
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Tckr... we said all along

Tckr... we said all along that the economy would not support something like this at this time.. and questioned the deadlines being imposed on commissioners to approve TEE.. and this hotel became the main justification.. now we find out that this hotel was nothing more than a proposal... its like someone says they intend to buy your house.. and they tell you that they have to close on a certain date.. so you go out and buy another house..and now the prospective buyers of your house say "oh fudge, it looks like we are having trouble getting financing." The people of Augusta and the commissioners were misled about this hotel.. we said at the outset that before the commissioners approve the TEE deal that they should have something in writing with assurances that the financing for the hotel was in place.. apparantly they did not get that.. but the hotel folks demanded commissioners approve a financing plan for the TEE.. now they are backtracking on their end of the bargain. We were not told that this was some mere proposal that might happen.. we were told this was a sure thing that only awaited approval of TEE for ground breaking to commence. Then we were told ground breaking would happen as early as winter then sping, now october and no groundbreaking, and come to find out, these supposed developers don't even have financing. Everything surrounding this TEE deal stinks to high heaven a year later.. we had bribes being offered to commissioners to change their votes, a near $50,000,000 payoff to secure Betty Beard's vote, threats and deadlines lobbed over a hotel that seems to now have been a figment of someone's imagination. Hopefully someone will fully investigate this.

thewiz0oz
9
Points
thewiz0oz 10/07/10 - 01:59 am
0
0
I find it to be fascinating

I find it to be fascinating to watch the "it can't be done"--"everyone involved is crooked" get religion. They're the first to claim they supported it all along when it is finally done. No wonder they have so much time to critize because they've never accomplished anything other than draw a paycheck from the "risk taker" who created a job for them. Anyone who says downtown Augusta is dead & not worth investing in needs to get off the couch, quit watching the "Amos Andy" reruns and get a life. Maybe volunteer to take a shut-in lunch or contribute to something positive. The Center City is arising from the ashes of neglect and destructive criticism - and those who abandoned it over the years can't stand to see it happen.

calculator25
0
Points
calculator25 10/07/10 - 10:08 am
0
0
Hey Oz...no one has said

Hey Oz...no one has said everyone involved is crooked but if the shoe fits wear it! No one has said downtown is not worth investing in but what they are saying is that things should be done in an open, fair, consistent, and professional manner that results in a sound investment of our valuable and limited tax dollars. We are tired of self serving people like you just trying to get the most they can for themselves to the point that
fairness and sound business practices are pushed to the bottom of the
pile. This usually results in our tax dollars not being wisely invested.

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