UPDATED - Sunday November 16th 1:45 p.m.
Late Friday I spoke with Deno Yiankes, President and CEO Investments and Development Division for White Lodging, (he called back rather than send an email).
I asked Mr. Yiankes why building permits had not been obtained, (as first reported by AFW) and if the project was on hold, or cancelled. He responded that the project had not been cancelled and most of the required permits had been obtained, including building permits and foodservice permits through the health department.
I also asked him who they had awarded the general contractor position. Mr. Yiankes said they had yet to appoint a general contractor for the project, but the building plans were completed.
Two things come to mind. 1). Before you can actually get a food permit you have to have the facility inspected, so I think he may be wrong in regard to foodservice permits. 2). I though the general contractor was responsible for obtaining building permits? If one has not been appointed, how did they do that, or am I wrong?
I asked about financing and Yiankes stated equity financing was in place, but the current financial environment was preventing them from obtaining a construction loan. He blamed it on the fact that most lenders are in a holding pattern until some of the new federal bailout programs are finalized.
He stated they only had one interested lender, and they were planning on taking the application to the loan committee in about two weeks. He said they have high hopes they would succeed with this lender within 30 days, and construction could start within 30 days of closing on the loan. If they failed with this institution he said it would most likely be spring before they could get a loan, and construction would start soon after.
I mentioned that Barry Real Estate was making a presentation to city council on November 25th and asked if a White Lodging representative going to be present. He said no. He also stated that Barry Real Estate was not involved with this project. The agreement with the city reads as follows:
THIS HOTEL DEVELOPMENT AGREEMENT (the “Agreement”) is made and entered
into this _____ day of July, 2007 (the “Effective Date”), by and among THE CITY OF FORT WAYNE, INDIANA (the “City”), DEPARTMENT OF REDEVELOPMENT, BY THE FORT WAYNE REDEVELOPMENT COMMISSION (the “Commission”) (the City and Commission collectively called the “City”), and WHITE LODGING SERVICES
CORPORATION, an Indiana corporation, with its principal address located at 1000 East 80th Place, Suite 600 North, Merrillville, Indiana 46410 (the “Developer”).
In reading the agreement, this may be their out.
G. The City shall have obtained all governmental approvals, and entered into
development agreements with other developers for the project known as Harrison Square (the “Harrison Square Project”) as described in Section 3.04. The construction of the entirety of the Harrison Square Project is a condition to Developer’s obligations hereunder, and the Harrison Square Project shall be progressing toward completion prior to commencement of construction of the Hotel by Developer. To this end the City shall have established to the reasonable satisfaction of Developer that all components of the Harrison Square Project, including but not limited to the Stadium, retail component and the Parking Facility shall have either commenced construction or the commencement of the construction thereof shall be eminent.
Since “The Harrison” can be considered a major component of the project, it appears White Lodging is not obligated to “commence construction”. Then you have this section of the agreement.
ARTICLE IV
CLOSING CONTINGENCIES
Section 4.1. Closing Contingencies. The obligation of the parties to close on the Hotel Site and undertake the obligations contemplated hereby shall be subject to the following contingencies having been satisfied on or before December 31, 2007:[...] 6. Developer shall have obtained a firm, binding commitment for debt financing sufficient to construct the Hotel.
White Lodging obviously did not meet the above requirement. Further down in the document is the following:
B. Contingencies to City’s Obligation to Close. The City shall be under no obligation to close on the Hotel Site unless the following conditions have been satisfied, or waived by the City, in writing, at the time of the Closing:
[...] 4. The City shall have received evidence that Developer has obtained financing sufficient to construct the Hotel, both from equity financing and a construction loan from a financial institution.
Did the city ignore this requirement in their haste to push this project through?
Fire away with the comments.
END UPDATE
Stephen over at the Around Fort Wayne blog is reporting the following.
Barry Real Estate, Harrison Square developers, had been scheduled to give a presentation to the Fort Wayne City Council during their next meeting on the 18th of November. Due to an unplanned extra budget hearing and numerous other items on the agenda, this has been pushed back to the 25th of November. Also during this time, White Lodging Services will be presenting information to the Council as well.
This is pure speculation on my part, but given the current state of the economy, I have a feeling we could be in for some bad news.
According to the Definitive Agreement signed for the new hotel, permits and approvals were to be obtained by September 1, 2008. I made a quick phone call to the Building Department this afternoon to learn that there have been no permits issued as of yet for the hotel area. More here.
Keep in mind that 50 hotel developers were approached for this project, and White Lodging was the only one to come to the table with a proposal.
Does this mean we’re not getting that 2nd-rate economy hotel on land the city of Fort Wayne sold for $17.50?
I called White Lodging to ask if the project was on hold or cancelled. They promised me an email response this afternoon.
AWB
Last 5 posts by AWB
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Dan - Why not suggest that “The Harrison”, which looks to have lots of empty rooms available, be converted to a cheap hotel - probably would have more than enough rooms for the two times per year that The Grand Wayne needs extra sleeping spaces for conventioneers!
More room for the IMAX.
JBK:
Are you even “hinting” at low-income houseing?
…Because if you ARE…I’m OK with that…up THERE.
(instead of down here)…lol.
I like the IMAX idea, Chris…nice touch.
B.G.
Dan - Did you get the promised email? Or are things like that “held-up” also from this group?
Dan,
Let’s be honest here…Are you really upset that the second rate hotel wouldn’t be built?
The whole thing was boondoggled from the beginning. I think it is time for the City Council and City Administration to step up to the plate and admit they screwed up, cut our losses and move on.
And at the end of the day, all we have downtown for a while is a new stadium and a parking garage. I can live with that for now, consideing I believe empty retail space, an empty hotel and empty condo’s will look worse than an empty green space around the stadium…
And on that note…if White Lodging doesn’t build, than the city should just re-acquire the land that they sold for $17.50 through either purchase for the same price…or “ghast” eminent domain.
John,
I did get a reply, a phone call actually and it’s pretty revealing. I will post tomorrow sometime.
Shoeginmachine & AWB,
Sounds good! Win Win!
And while we are at it…
Here is a great Idea for a Hotel…take the money that would have been spent on the Marriot and spend it on renovating the Indiana Hotel. I am not sure how many rooms it has, but there seems to be trend in the US of upscale hotel joints going into old buildings and renovating them. Still not restuarant…but we were not going to get one anyways…and personally, I would be much more in favor of losing tax payer dollars to a renovation project with a purpose as opposed to selling out to another non-local investor. (heck will save at least 1.5 million by not having to build that UGLY eyesore of a crosswalk over Harrison)
Are you listening CITY COUNCIL.
Dan - Am waiting, with bated breath! What did White say?
I think due to the changes in our national economy, now may be a good time for us to sit back and think about what may be best for our city. This was a stupid idea to begin with, but with the changes in the country, it has become even dumber. Seems to me the condo idea is a bust, and the hotel may not be far behind.
Alternitives may be something to look into.
Where Graham Richard failed was in the lack of long-term planning. Successful planning of any downtown redeelopment is not a 2-5 year or even a 5-10 year project. Look at Indianapolis as an example. They started back in the mid 70’s and it took over 20 years for the larger portion of their plan to come to fruition.
Richard, IMHO thought this was going to be his “grand legacy”. Instead, in the end it will be a legacy of failure that history remembrs about Graham Richard. Cloak and danger backroom deals were crammed down the unwitting publics throats without *any* opportunity for reasonable public comment or discussion. Short-sighted city councilmen like Pape (and others) insinuated we were all idiots if we didn’t agree with them. Funny, you don’t hear them saying much now, do you?
Indianapolis’ redevelopment was not a sole result of the city’s efforts. Private investment led the way with Circle Centre Mall being the most significant investment. Had we taken a look at the history of Indianapolis’ redevelopment and taken a more conservative approach we would not be in the position we’re in today.
It took Indianapolis 30+ years to fix their problem in toto. Graham Richard thought it could be done in a few years, and now the entire thing is on the verge of imploding.
We can get out of the hotel deal and I say let’s do it. Ditto for the condo project. How about bringing the public in and let public sentiment help drive the fix for the nightmare Richard and his cronies has gotten us into?
Dan - The problem is that the Jefferson Pointe TIF CANNOT finance the debt service on the lease/bond agreement with the Fort Wayne Redevelopment Corporation (the shell group set up to float the bond to circumvent the State of Indiana Code that will not allow more than a small amount of indebtedness by any political entity) for the money already spent on the unnecessary baseball stadium and the unneeded parking garage. Since our former mayor, one of our County Commissioners and a whole host of city employees and councilmen convinced the Department of Local Government Finance of the State of Indiana to allow the use of our city property tax levy to “back-up” this lease as to payments on it, this failure will bite us very hard - much worse than the Kitty Hawk bond issue at Fort Wayne International Airport (which has been added to next years property tax already).
Plus Leatherman and company are planning to use “excess???” revenue from the Jefferson Pointe TIF to buy the old Dimension Ford property just West of Swinney Park!!! Can you say MELT-DOWN - right here in Fort Wayne! If our Common Council members can’t get this craziness stopped, we can just shut our city down.
The asininity of using TIF revenue to fund items OUTSIDE the Economic Development Area is what has also led to this. As I have reported previously, VERY, VERY, VERY LITTLE of the Jefferson-Illinois Road TIF revenue has been spent for very, very, very little on the triangular section covered by the original EDA (less than 10 % to date - over 14 or 15 years).
Dan,
Since JK brought it up…have you heard anymore into the fact that both UPS and Kalitta Air were looking into moving into the old Kitty Hawk Space.
The new Holiday Inn across from the current ballpark is looking pretty good. Dr. Wartell and IPFW made that happen and without a bond issue I believe.
I think this was always about the ballpark downtown which is, not surprizingly, the only thing moving forward. All the rest was an inducement to make the project look to be more than what it was, but all parts that could be easily shed if need be, as apparently they are.
Sadly, I can’t count on council for any tough questions, nor anyone from the city or the project team for truthful answers.
John Henry - Don’t forget the unnecessary new parking garage - That was so our “project manager” could get some “free”,covered parking spots for the outfit he retired from (which, by the way, is no longer headquartered in Fort Wayne where it was born about a hundred years ago)
Just like it was written yesterday:
Bobett Kelley on May 2nd, 2008 10:21 pm Very well said.
Future headlines:
Billionaire Dean White and his White Lodging Services won approval for $(x) million public subsidy for his (x)amount of hotel-rooms, J.W. Marriott Hotel located next to the Harrison Square Center was approved at last night’s
Fort Wayne city council meeting.
In a perfect world, cities would not subsidize sports franchises, hotels or places to eat.
However, Fort Wayne does not live in this world and we must reflect on the consequences of that fact.
John - OK… How many present and past city employees came rolling in via Lincoln Life? Lincoln, years ago, looked at building their own parking garage but passed on it. How much of the land purchased down town was leased by or owned by Lincoln Life as parking area?
The hotel is not going to happen in the near future. The city should demand to see the letter of loan for the long term financing but then that blow the story out of the water.
To get construction permits a company needs to file final prints that where used to approve the const. permits. Hence, they should be public record and anyone wanting to see them has a right to view them. They are not classified documents once the permits are issued.
The Board of Health permits is strange to me. I have never heard they issued permits for building. I know they will work with companies in the design plans but they do not issue permits until everything is done.
What I see happening at City Council meeting will be a game of SHADOW BOXING! A bunch will be said but noghting backed up with facts. Council will act like dormats and say THANKS and will move on. The rest of us will be left going WHAT THE HECK!
Just like tonight at City Council meeting. One of Mayor Henry’s biggest fights and him or his number two man not there. I guess he figured they had the votes already in place to take care of what they wanted. Which they did!
So do not count on seeing or hearing anything outside of hot air. If someone is getting close to boxed in you will hear that they do not have the information with them but will get back with City Council…. What is stupid? We the people who keep thinking someone we elected gives a damn about the taxpayers over covering for someone taking our money.
Please, someone, have the guts to call this fiasco dead. I find it incredible that the manger of the project for Barry could not ( or would not ) state how many units have been sold at last nights council meeting. I heard a rumor that Martin Real Estate, the company that was first selected to sell the condos, has returned deposits for the units they had sold. This has gone on for too long. I want our local city government officials to stay out of land development; they are not very good at it. This is a textbook example of waste and ineptitude.