Downtown Hyatt gets mortgage bailout

[thelakelander]

Another reason for why the convention center should be moved to the Bay Street courthouse site.  We can't even support the one convention center hotel we have right now, which we've already subsidized to open up in downtown.  A convention center at any other site in DT would require paying for the convention center and subsidizing another large hotel and supporting businesses.

The downtown Hyatt, Jacksonville's signature river front hotel, was the recipient of a bailout from Hyatt Hotels Corp, according to the Wall Street Journal.

The Journal is reporting that Realpoint LLC, a credit-rating agency, had identified the hotel as having gone delinquent on its mortgage as of last month.  Realpoint attributed the cause of the delinquency to the hotel's occupancy rate, which is reported to have registered at 56% at the end of June.

Thanks to Hyatt Hotels cash injection, the hotel is once again current, and Hyatt has pledged to provide additional funds to keep it that way.

Read the Wall Street Journal's full article here.

The Hyatt, which originally opened as the Adams Mark Hotel, has had a troubled almost since its inception.  The project was the recipient of tens of millions of dollars in city incentives when it was built.  At the time, it's architecture was widely criticized as bland and frequently likened to a cereal box. 

In 2003, the City of Jacksonville, the Downtown Development Authority and the Jacksonville Economic Development Commission, along with former Mayor John Delaney, was sued by a group of Jacksonville developers over the project.  The developers, led by Charles "Bucky" Clarkson, said the city "failed to act in good faith" when it negotiated the deal with HBE Corp., the entity that constructed the Adams Mark.  That lawsuit was settled by the city in 2006.

In 2005, the hotel was sold and converted to a Hyatt.

http://jacksonville.com/interact/blog/abel_harding/2009-11-24/downtown_hyatt_gets_mortgage_bailout

Helping Hand by Hyatt Hotels

A Delinquent Mortgage Is Made Current Again at a Jacksonville Property

Amid the commotion of hotel owners and hotel operators fighting about cutting costs in this downturn, there are occasions in which operators pull out all the stops to make sure that owners don't go under.

Case in point: Hyatt Hotels orp. this month helped the owner of the 966-room Hyatt Regency Jacksonville in Florida avoid default on its $150 million securitized mortgage.

The hotel, owned by Chartres Lodging Group LLC, had gone delinquent on its mortgage last month, according to debt-rating company Realpoint LLC. The hotel's occupancy and average rate, which registered 56% and $119, respectively, at the end of June, have suffered amid the downturn and a sharp drop in corporate meetings, Realpoint says.

In stepped Hyatt, which agreed to cover as much as $5 million in payments on the mortgage in the event Chartres couldn't. Hyatt also pledged to cut its management fee in exchange for an extension of the pact's term and to pay up to $1 million in future costs for furniture, fixtures and equipment. Hyatt declined to comment. But the benefits for Hyatt likely are the extension of its management contract and avoiding disruption.

After Hyatt's contributions, the hotel's mortgage was again classified this month as current. "The loan and the property are in good standing," says Chartres president and co-founder Robert D. Kline.

â€"Kris Hudson

http://online.wsj.com/article/SB10001424052748703819904574556191464816208.html?mod=googlenews_wsj

[Charles Hunter]

You are so right, lakelander - and the Mayor says moving the Convention Center isn't on his radar.

[fsu813]

"At the time, it's architecture was widely criticized as bland and frequently likened to a cereal box."

- shocking! wait....did they design the new traportation center too? 

[tufsu1]

actually the plans for the new transportation center are far better!

[fsujax]

wow. just wow. Imagine if they shut down that hotel. The design is bad, but the landscaping looks good.

[Jason]

You know, getting a room during the off season is very reasonable and a great mini getaway for the us suburbanites.  I've enjoyed a few nights there with the nearby Landing and Bay Street and Sports district to keep me busy.

[BridgeTroll]

We have a river view room for the boat parade this Saturday.  Will party at the Landing during the boat parade and fireworks then hit Bay st and Dos gatos.  Hyatt is great as a "party central".

[mtraininjax]

It does look like a cereal box, but so does the Crowne Plaza (former Hilton) and the Omni, none of the downtown hotels have any real character that the old downtown hotels had when built. The Mayor has moved on to counting tiddly-winks with new mayoral candidates, news at 11.