The owners of a new dual-branded Hyatt House and Hyatt Place — to be built on East Moline's riverfront — have closed on a construction loan to build what will become a prototype for the hotel chain.
Dallas-based HALL Structured Finance, a private lender to the real estate industry, announced Wednesday that it has closed a $23.2 million first lien construction loan to finance development of the 233-room, nine-story Hyatt House and Hyatt Place hotel.
The co-branded hotel is owned by the Bend Hotel Development Corp., which includes East Moline businessmen Dan Murphy, former owner of Precision Pipeline, and Larry Anderson, owner of East Moline Glass. The owners will finance the remainder of the $40 million project. It is the signature project of The Bend on the Mighty Mississippi, a 132-acre redevelopment project by Murphy's Great River Property Development.
"The project's superior location right on the Mississippi River, strong local economic climate and distinguished Hyatt flag made this a model investment for us," Mike Jaynes, president of HALL Structured Finance, said in a news release. "With four of the area's largest employers located within five miles of the planned hotel, both visitors and locals will greatly appreciate this new amenity."
The hotel will feature 134 upscale Hyatt Place rooms and 99 all-suite extended-stay Hyatt House rooms. Olympia Hotel Management is managing the construction project and will be the hotel operator. It will be Hyatt's first blended dual-flagged hotel built from the ground up and become a prototype for future Hyatt developments.
The financing pushes forward the long-awaited redevelopment of the former Case New Holland, or CNH, plant, which closed in 2004. While construction has begun with Russell, the project's general contractor, and Valley Construction on site, developers are planning an April 20 groundbreaking ceremony.
In addition to the hotel, the first phase (42 acres) of The Bend will include a 324-multi-family unit complex and a public park. Two restaurants and four retail sites are expected to soon be under development.
"This hotel and overall development will be an exciting addition to the Quad-Cities area and we're looking forward to completing the development," said Murphy, president of both Great River and The Bend Hotel Development Corp. "A lot of people have worked very hard to see this project get off the ground and we appreciate the efforts of everyone who has contributed."
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Murphy applauded HALL Structured Finance for working "to provide a specialized capital solution to meet our needs."
According to Ellen Marsau, communications director for the HALL Group, HALL Structured Finance is an alternate lender to the real estate industry nationwide. It helps finance new construction, major redevelopments, adaptive reuses and lately, has seen more activity with the hotel industry.
"We have focused a lot on the hospitality industry just because the banks seem less willing to finance hotels," she said, adding that HALL also is seeing the same trend with multi-family developments. Marsau added that the tightening of credit and new regulations after the 2009 recession "has made it much more difficult for developers to get bank financing."
"The pipeline has been so robust this year in developers looking for alternative financing," she said.
The project's financing was welcome news to East Moline Mayor John Thodos, who has waited four years for the project to break ground. "Projects like this don't happen overnight. This is not just going to benefit our city, but the entire Quad-Cities. It's long overdue."
According to Thodos, the city has completed its documentation with Triumph Bank to finance $10.2 million for the developers to build the project's infrastructure. "When the buildings are built, we get 100 percent of the new tax increment until our investment is paid back. After that, the developers get 80 percent of the property tax and the city gets 20 percent through the life of the 23-year TIF (tax increment financing agreement)."
"This is a real win for everyone," he said.