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  #41  
Old Posted Aug 3, 2013, 3:14 PM
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Originally Posted by Flyers2001 View Post
Is the set up/height still as proposed?
Yup 50 stories, 700 rooms split between W and Westin Element.
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  #42  
Old Posted Aug 3, 2013, 7:17 PM
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Yup 50 stories, 700 rooms split between W and Westin Element.
Awesome to hear. This will make a slightly visible impact to the skyline in the location that it is at. Good Stuff.
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  #43  
Old Posted Sep 16, 2013, 2:27 PM
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Any additional news on this project. I read that it was suppose to begin construction this fall. I know funding was in place, but there were some final legal things to go past.

Wiki has it listed as 52 stories, 582 Feet still, which is a nice size for where it will be located.
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  #44  
Old Posted Sep 16, 2013, 2:34 PM
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I don’t know anything outside of what’s been posted in this thread but unless they have been resolved in the last few months, I wouldn’t describe the legal issues to be “some final legal things to go past”. Basically, the owner’s former partners are accusing him of swindling them out of the property. To me, it seems like one of those issues that could drag on for years.
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  #45  
Old Posted Sep 16, 2013, 3:42 PM
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Originally Posted by Flyers2001 View Post
Any additional news on this project. I read that it was suppose to begin construction this fall. I know funding was in place, but there were some final legal things to go past.

Wiki has it listed as 52 stories, 582 Feet still, which is a nice size for where it will be located.
From what I hear it is still in precon and will be sometime before it gets built
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  #46  
Old Posted Oct 7, 2013, 7:02 PM
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News on the W Hotel.

Quote:
The developer for a proposed W Hotel at 1441 Chestnut St. in Philadelphia is on the cusp of receiving tax increment financing for the $280.4 million project.

A bill was introduced by Darrell Clarke, Philadelphia City Council president, and Councilman Bill Greenlee, to designate the site at 1441 Chestnut as a “Headquarter Hotel Tax Increment Financing District” and deem the parcel as blight. The property sits across from City Hall and next to the Ritz Carlton.

If that bill passes, the project would receive $33 million in tax incremental financing (TIF), according to the bill. The tax incremental financing would go into effect Jan. 1, 2014, when construction of the project is expected to begin, and run for 20 years.

In addition, the project is seeking to receive a total of $75 million in tax-payer subsidies. The developer would put up $205.4 million.

The project will consist of 780,000 square feet and 700 rooms of which 240 rooms will be dedicated under the W Hotel flag and 460 rooms under the Element by Westin flag. It will have 41,000 square feet of meeting and banquet space, an 8,600-square-foot restaurant, and a 185-space, below-grade parking garage.


The development is projected to create 1,800 construction jobs and 450 permanent jobs. If it gets kicked off next year, the hotel is could be completed by Jan. 2017.
http://www.bizjournals.com/philadelp...in-public.html
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  #47  
Old Posted Oct 7, 2013, 10:07 PM
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Originally Posted by summersm343 View Post
News on the W
$75MM in additional grant subsidies beyond a TIF for the W?

Not a chance. In the best of times, that wouldn't happen, particularly with a hotel. Now that schools are broke, noone wants to pay to fix it, and these idiots people think they are going to get $75 million? Right.

I think Brooke Lenfest must not have a clue about real estate. He seems just to be an open cash register for high price lawyers, architects, and failed development partners. Reminds me a bit of the rich kid with Mandeville Place: trying to compete in the big leagues with a JV team pedigree. I wish a real developer would get hold of that site.

That site will go through many more iterations before anything happens.

OK, I am a putz. I got called out. Striked-out lines are ignorant to have posted.

"blenfest" - presumably Brook Lenfest, the developer - has posted per below that the $75 million public participation includes (i.e., is not in addition to as implied by Kostelni) the $33 million TIF and implies that the city will also be providing a federal HUD108 loan. HUD108 loans can be substantial and, like TIFs, are not money directly from City funds (funds come via HUD bond issues). They are mortgage loans, usually subordinate, that must be repaid - a default would hit the City's community development budget big time. To clarify (better late than never), I meant to suggest that there was no way the hotel project would receive $75 million in City or Commonwealth grant funds - free money, that is, like RACP funds, etc. That much, at least, is probably true. My writing, however, was imprecise and I stand corrected. According to blenfest, it would appear the project isn't getting grants and the $75 million includes the TIF. It would appear, then based on what he wrote, that the City is providing a large subordinate second mortgage HUD108 loan. That is a pretty risky proposition for the City, if you ask me. But nobody's asking me, obviously.

In any event, I am duly chastened. My apologies to Mr. Lenfest for being a jackass .

Last edited by Cro Burnham; Oct 9, 2013 at 2:29 AM. Reason: for being a dick
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  #48  
Old Posted Oct 8, 2013, 10:54 PM
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Originally Posted by Cro Burnham View Post
$75MM in additional subsidies beyond a TIF for the W?

Not a chance. In the best of times, that wouldn't happen, particularly with a hotel. Now that schools are broke, noone wants to pay to fix it, and these idiots think they are going to get $75 million? Right.

I think Brooke Lenfest must not have a clue about real estate. He seems just to be an open cash register for high price lawyers, architects, and failed development partners. Reminds me a bit of the rich kid with Mandeville Place: trying to compete in the big leagues with a JV team pedigree.

I wish a real developer would get hold of that site.

That site will go through many more iterations before anything happens.
Shucks, I guess I'm just doing the best I can with my JV team pedigree. Maybe you could school me on RE development in your spare time between posting.

The $75M includes the $33M TIF.

The abatement is worth maybe $14M not factoring in a discount rate since its value is spread over 10 years.

Much of the so called subsidies like the HUD 108 are repaid with interest.

The hotel will provide $12.3M to the District in excess of what the parking lot would pay and an additional $25.8M to the city. The hotel will not get built without the TIF.

The TIF is the last piece in the capital stack. All other sources of the budget have been secured.

The hotel has already brought future convention business to Philadelphia that made it clear that they would not be coming to Philadelphia if the hotel weren't coming.

Besides the additional taxes mentioned above and the windfall at the end of the TIF period for the City and District there is the incalculable benefit of the additional conventions that will come to Philadelphia and the money those out of town guests will spend. In addition there are the 1,800 construction jobs and 450 permanent jobs.

Maybe if you have 5 seconds or so you can come up with lots of alternatives more worthy of support.
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  #49  
Old Posted Oct 8, 2013, 11:40 PM
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Originally Posted by blenfest View Post
Shucks, I guess I'm just doing the best I can with my JV team pedigree. Maybe you could school me on RE development in your spare time between posting.
"Once the project is completed, its market value is expected to be $95.8 million. It is expected to generate $220.6 million in incremental tax revenues over 20 years and will represent an estimated $25.8 million net gain to the city and $12.3 million to the school district over those two decades."
This project is really expected to only be worth $95.8 million after costing 280.4 million to build?
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  #50  
Old Posted Oct 9, 2013, 12:25 AM
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Shucks, I guess I'm just doing the best I can with my JV team pedigree. Maybe you could school me on RE development in your spare time between posting.

The $75M includes the $33M TIF.

The abatement is worth maybe $14M not factoring in a discount rate since its value is spread over 10 years.

Much of the so called subsidies like the HUD 108 are repaid with interest.

The hotel will provide $12.3M to the District in excess of what the parking lot would pay and an additional $25.8M to the city. The hotel will not get built without the TIF.

The TIF is the last piece in the capital stack. All other sources of the budget have been secured.

The hotel has already brought future convention business to Philadelphia that made it clear that they would not be coming to Philadelphia if the hotel weren't coming.

Besides the additional taxes mentioned above and the windfall at the end of the TIF period for the City and District there is the incalculable benefit of the additional conventions that will come to Philadelphia and the money those out of town guests will spend. In addition there are the 1,800 construction jobs and 450 permanent jobs.

Maybe if you have 5 seconds or so you can come up with lots of alternatives more worthy of support.
ok, you got me, i was being unduly obnoxiously snarky, as is my habit, and sounded like a dick. my apologies. the JV comment was particularly stupid and i hereby withdraw it. my ass has been appropriately smacked.

what's the other $42 million? you are seeking a $33 million hud108 loan to be repaid by the TIF? or,in addition to the TIF, a separate hud108 subordinate loan not collateralized by the TIF?

if the hud108 is subordinate to $100MM plus million in senior debt and not secured by the TIF cash flow, the city is seriously going out on a limb. If I recall correctly, for example, the city had to take a major haircut with a similar structure at the Ritz.

where is the remaining $9 million coming from?
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  #51  
Old Posted Oct 9, 2013, 12:46 AM
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Originally Posted by blenfest View Post
Shucks, I guess I'm just doing the best I can with my JV team pedigree. Maybe you could school me on RE development in your spare time between posting . . .
Maybe if you have 5 seconds or so you can come up with lots of alternatives more worthy of support.
BTW, i am surprised (obviously) that billionaires actually read SSP. That's kind of funny.
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  #52  
Old Posted Oct 9, 2013, 2:05 AM
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  #53  
Old Posted Oct 9, 2013, 3:54 AM
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Originally Posted by Cro Burnham View Post
BTW, i am surprised (obviously) that billionaires actually read SSP. That's kind of funny.
Billionaires are people too. If it is actually him he definitely wins the award for best response to criticism ever. As for alternative that are more worthy of support I am not about to tell someone else how to spend their money especially someone who spends a considerable amount of money funding worthy charities in the region. I do really like this hotel project and think it will benefit the city.

Now if the question is how would I personally spend $280 million dollars to better improve Philadelphia by building real estate that is a question that I am willing to answer.

First, the criteria that I am setting for spending the $280 million is as follows:
1. Immediate short-term return in not important. I am taking this from the fact that PBJ stated the hotel will be worth $95.8 million on the day it is complete for an initial development return of roughly -56% on the $220 million the developer is putting up.
2. Job creation and tax revenue to the city is the top priority for the developments.
3. I am assuming $280 million is not enough to fund rail with a dedicated right of way that runs up 8th Street.

My spending philosophy is to put the money into areas that have current infrastructure in place to handle added density from workers and residents using the existing zoning that is already in place. Ideally we would not have to deal with zoning variances but I am going to assume minor variances would be approved as is typical under the current system. Zoning is taken from phila.gov

The first project that I would do is develop an office building between W Jefferson to W Oxford St along N Broad Street http://goo.gl/maps/kBRxw
The land along N Broad totals 1.75 acres and is zoned CMX 2.5 meaning the building area is roughly 381,150 with a maximum height of 5 floor with street level retail. The block is currently owned by 4 different groups including Temple and two developers along with a non-profit. For arguments sake I am going to use $5,000,000 dollars to acquire the land or roughly $65.60 per sf of land. I will use $250 a sf for construction costs or a total of $95,250,000 to build the building. Ideal tenants would be Temple, venture capital investors, co-working location, education related services, plus roughly 76K square feet of potential retail. Break even rent is roughly $18.36 per sf on a triple net basis. Given all the student housing in the area I think the retail portion would be able to easily support that. The net positives would be the continued growth of the Temple area as the 4th largest jobs center in the city. Assuming 300k sf is office space and it is 95% occupied with the average worker taking 250 sf this would add roughly 1,200 office workers to the area daily. The added mix of office workers along this stretch of N Broad would greatly enliven the area and be great support for retail along this portion of N Broad leading into Temple.

I would spend the remaining $180 million buying and renovating dilapidated mixed-use building along Kensington Avenue, Point Breeze Avenue and N Broad Street and then offer free rent for the retail portion of the units. The idea behind this strategy is it would enable local businesses to open providing new jobs and tax revenue to the city along with eyes on the street and added density as vacant apartment units are brought back onto the market. Assuming $180,000 per renovated building that allows for 1,000 buildings to be renovated along major arterial roads in the city and would brings thousands of new jobs into the poorest sections of the city.
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Last edited by Jelly Roll; Oct 9, 2013 at 4:15 AM.
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  #54  
Old Posted Oct 9, 2013, 4:09 AM
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Originally Posted by blenfest View Post
Shucks, I guess I'm just doing the best I can with my JV team pedigree. Maybe you could school me on RE development in your spare time between posting.

The $75M includes the $33M TIF.

The abatement is worth maybe $14M not factoring in a discount rate since its value is spread over 10 years.

Much of the so called subsidies like the HUD 108 are repaid with interest.

The hotel will provide $12.3M to the District in excess of what the parking lot would pay and an additional $25.8M to the city. The hotel will not get built without the TIF.

The TIF is the last piece in the capital stack. All other sources of the budget have been secured.

The hotel has already brought future convention business to Philadelphia that made it clear that they would not be coming to Philadelphia if the hotel weren't coming.

Besides the additional taxes mentioned above and the windfall at the end of the TIF period for the City and District there is the incalculable benefit of the additional conventions that will come to Philadelphia and the money those out of town guests will spend. In addition there are the 1,800 construction jobs and 450 permanent jobs.

Maybe if you have 5 seconds or so you can come up with lots of alternatives more worthy of support.
Welcome to SSP, and thank you for the clarifications. Cro's original comments aside, I think everyone here is really excited about the W/Element proposal and appreciate all the work required to clear the hurdles at that "storied" lot.

Are you able to confirm the proposed building's floor count and/or height?
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  #55  
Old Posted Oct 9, 2013, 4:33 AM
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Originally Posted by blenfest View Post
Shucks, I guess I'm just doing the best I can with my JV team pedigree. Maybe you could school me on RE development in your spare time between posting.
Happy to oblige. I am always available to share my advice which, as people here will attest to, I find to be of exceedingly high value and excellent judgment . Please feel free to avail yourself of this goldmine of expertise anytime.
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  #56  
Old Posted Oct 9, 2013, 12:16 PM
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Originally Posted by Jelly Roll View Post
"Once the project is completed, its market value is expected to be $95.8 million. It is expected to generate $220.6 million in incremental tax revenues over 20 years and will represent an estimated $25.8 million net gain to the city and $12.3 million to the school district over those two decades."
This project is really expected to only be worth $95.8 million after costing 280.4 million to build?
The valuation was approved as the taxable value and it was based on a comp set of hotels within the city and how they are taxed. It is before debt so upon completion the hotel has a negative value until it pays down the debt with cash flow. If during the term of the TIF the city raises the taxes then the TIF will be paid off in less than 20 years. Not all taxes were TIF'ed.
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  #57  
Old Posted Oct 9, 2013, 12:18 PM
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Welcome to SSP, and thank you for the clarifications. Cro's original comments aside, I think everyone here is really excited about the W/Element proposal and appreciate all the work required to clear the hurdles at that "storied" lot.

Are you able to confirm the proposed building's floor count and/or height?
I have arguably said to much already. The building will be at least 550'.
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  #58  
Old Posted Oct 9, 2013, 12:30 PM
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ok, you got me, i was being unduly obnoxiously snarky, as is my habit, and sounded like a dick. my apologies. the JV comment was particularly stupid and i hereby withdraw it. my ass has been appropriately smacked.

what's the other $42 million? you are seeking a $33 million hud108 loan to be repaid by the TIF? or,in addition to the TIF, a separate hud108 subordinate loan not collateralized by the TIF?

if the hud108 is subordinate to $100MM plus million in senior debt and not secured by the TIF cash flow, the city is seriously going out on a limb. If I recall correctly, for example, the city had to take a major haircut with a similar structure at the Ritz.

where is the remaining $9 million coming from?
First, I would like to set the record straight; I am not a billionaire. I am also not at liberty to disclose all of the funding sources as one has a non disclosure without written permission from the grantor. After the TIF passes there will probably be more formal announcements.

Don't confuse me and how I do business with anyone else please and definitely not the Ritz. I am aware of what happened with the HUD 108 loan there. Yes it is subordinate to the bank loan and no it is not supported by the TIF. The bank loan as a percent of project costs is low by comparison to historical loans to hotels.

I would like to add by the way the every new build hotel that has ever happened in Philadelphia has received substantial grants and loans like HUD 108 and RACP or IFIP. To the best of my knowledge they ALL have received in excess of what this project is getting as a percent of the total project cost.

I'm signing off now until we get through the final TIF approval. There has never been one introduced and not approved but I don't want to be the first.

P.S. The State and City think it is a high priority to support the convention center they spent nearly $800M expanding. There are not enough rooms to fully utilize the convention center and 28% of the business the center loses is because of lacking hotel rooms generally and a big box hotel specifically.
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  #59  
Old Posted Oct 9, 2013, 2:57 PM
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Originally Posted by blenfest View Post
I'm signing off now until we get through the final TIF approval. There has never been one introduced and not approved but I don't want to be the first.

P.S. The State and City think it is a high priority to support the convention center they spent nearly $800M expanding. There are not enough rooms to fully utilize the convention center and 28% of the business the center loses is because of lacking hotel rooms generally and a big box hotel specifically.
Thank you for the information and good luck with the development!
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  #60  
Old Posted Oct 9, 2013, 5:07 PM
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Please build more towers in philly after this one
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