| |
|
|
Borrow time
BY DAVID S. BERNSTEIN
|
|
|
|
|
When Boston mayor Tom Menino secured $40 million in "urban-assistance" loans from the Department of Housing and Urban Development, he made crystal clear who was getting the money: three of the four stalled hotel projects near the new Boston Convention and Exhibition Center (BCEC). Now two of those projects are opting out, and three others want in. Menino stood on the South Boston BCEC construction site when he announced the Boston Hotel Development Loan Fund on August 6, and, lest that be too subtle, Boston Redevelopment Authority (BRA) director Mark Maloney declared that priority would be given to developers of three "big boxes near the convention center." Since only previously BRA-approved projects were eligible to apply, the obvious reference was to Starwood’s 800-room "Phase I" convention headquarters hotel, Nicholas Pritzker’s 600-room Grand Hyatt Fan Pier, Joe Fallon’s 440-room Renaissance Hotel, and the 422-room Intercontinental at 500 Atlantic Avenue. Not one of them has broken ground; the loans are intended to provide the "gap financing" to get them going. But the Renaissance and the Intercontinental did not apply. And three other hotels — smaller and far from the BCEC — did. Will their applications get a fair shake? The developers don’t see why they shouldn’t. "[The HUD loan] is not specifically for the convention center," says Francois Nivaud, who adds that $10 million or $15 million would erase "a good piece" of his current funding gap for the North End Battery Wharf Hotel. Maloney insists the process isn’t rigged, and that the three smaller applicants — Nivaud’s Battery Wharf, Boylston CWB’s Mandarin Oriental Hotel in the Back Bay, and Intercontinental Real Estate’s One Court Street — have an equal shot at the loans. "We are processing them exactly the same way," he says. However, he also says that the loans don’t necessarily have to go to three recipients. The $40 million could get split four or five ways; but it could also get split two ways, between Starwood and Fan Pier. In a fair world, it’s hard to see why those two "big boxes" deserve the loans over the others. In June, Starwood and its local partners — facing a $15 million default to the city — swore that they had secured their financing. If that was true, there shouldn’t be any gap to finance. As for Fan Pier, Pritzker has publicly stated that he’d prefer to postpone the hotel project indefinitely, and Massachusetts Convention Center Authority acting director James Rooney says that the project is probably "a couple of years" from groundbreaking. But not awarding the HUD loans to those projects would further embarrass the mayor, who was charged with developing hotels for conventioneers to stay in. As of last fall, the BRA was claiming that nine South Boston Seaport hotels, totaling some 4400 rooms, were in the offing. Not one has broken ground. Although Maloney insists that he expects the Renaissance and 500 Atlantic to begin construction next year, their failure to apply for the loans casts doubt on that. Who will prevail, the three upstarts or the two big boxes? The loans should be awarded in late October.
|
