HYATT in TROUBLE - $5 mil Assist Fails to Stave Off Delinquency

[chipwich]

I don't imagine too many banks would like to foreclose on a $150 million asset right now.  So that makes me believe that Chartres is more in the driver's seat in regards to financing than thier lender.  Furthermore, it is the most visible property in Jacksonville, so I doubt Hyatt will want to loose the flag on this property as well.

I agree stjr that there is a strong possibility that Chartres may just let this particular property go.  While I agree that the hotel is most likely too large for Jacksonville, I have my doubts regarding how feasible it would be reduce and replace the number of hotel rooms with something different.  It's not like folks are beating down the door to rent office or retail space downtown.

[thelakelander]

If they let it go, my guess would be that some other major organization (Marriott perhaps...) picks it up at a bargain price.  Sort of like how Sleiman ended up with the Landing after Rouse decided to bail.

[thelakelander]

Chop it down to 500 rooms or so and you're fine.  Cut it down to 100 and the game could change, although you still have the Landing and East Bay that make the site a pretty attractive centralized location for a CC.  In any event, it would not be in the city's best interest to subsidize another large scale hotel at another DT location 3-5 years down the road.

Whatever notes they have pulled on the property won't go away by reducing the amount of rooms.  Sure their variable operating costs might shrink, but they probably have some pretty serious debt unless they paid cash (highly doubtful in 2005 when they acquired).

No doubt.  I was just responding to Stjr's comment on how reducing the amount of rooms could impact the potential of the courthouse site being used for a new convention center.

[stjr]

They could just "cover" the rooms like the excess seats at the stadium!  Maybe, we could cover the Skyway while we are at it.    Don't fix our problems, just cover them over.  We seem to excel at that around here.  Where is Christo when you need him?



Chip, I agree, any lender will go as far as possible not to take this property back.  Lenders and hotel owners have told me the same thing.  "Too big to fail."  But, at some point there is a limit.  If the lender sees no light at the end of the tunnel, they will have to bite the bullet.  I suspect it could take 6 to 12 months or more to see where this goes.   

[simms3]

Need I mention the Mansion in Atlanta was foreclosed on?  Had a conversation with the asset manager of Sovereign just this morning and that building cost around $212 million to build.  It was auctioned off for $38 million as I recall.  The Hyatt ain't nothing compared to that   There are buildings right and left that hold much larger mortgages and notes than the Hyatt that are foreclosed on all across the company (I mean Atlanta is pretty bad in the office and hotel sectors right now, the W Downtown is about to enter forclosure within a week and we have had several empty 300+ unit condo buildings and several class A office buildings of at least 400,000 SF go back to the lenders).  I myself am trying to get into the work out department of some sort of financial institution, either bank or something like GE Capital.  They are busssyyyy right now , just not hiring as much as they should

[duvaldude08]

Im not to worried. Usually big hotel chains dont just close, they usually get bought out by another brand like Marriot, sheraton, etc. As you see the hilton didnt close, it was bought by crown plaza.

[Jerry Moran]

Maybe Obama will buy the Hyatt?

[tufsu1]

Maybe Obama will buy the Hyatt?

and turn a profit for the taxpayers, like he did with GM  

[Cricket]

All the talk about convention centers is ass backward. Hotels don't attract covention centers and convention centers don't attract conventioneers. Jacksonville has to be first transformed into a destination city, an exciting place where corporations want to convene and be entertained.

Let's face it. We don't have casinos or nightlife or enough festivals to suggest to companies way across the country that Jacksonville is the place. First and foremost, Jacksonville has to become a place where people want to visit and all the superficial improvements that are bandied about on MJ ain't gonna do it, like parking, lighting, cleaning.

Nothing stands out apart from the St. Johns River and The Landing.

[duvaldude08]

All the talk about convention centers is ass backward. Hotels don't attract covention centers and convention centers don't attract conventioneers. Jacksonville has to be first transformed into a destination city, an exciting place where corporations want to convene and be entertained.

Let's face it. We don't have casinos or nightlife or enough festivals to suggest to companies way across the country that Jacksonville is the place. First and foremost, Jacksonville has to become a place where people want to visit and all the superficial improvements that are bandied about on MJ ain't gonna do it, like parking, lighting, cleaning.

Nothing stands out apart from the St. Johns River and The Landing.

All stated above is true, however the Convention center folk themselves stated that one main reason they fail to attract major conventions is because there is no adjacent hotel. And that came from the horses mouth. The factors you stated are also true as well.

[tufsu1]

I partially disagree Cricket....I've seen the effect of a new convention center in 2 cities persnally.

Baltimore was in severe decline from the 1950s through the 1970s....so plans were drawn up for the Inner Harbor....the convention center opened in 1979, followed by the National Aquarium, Harborplace, and Hyatt hotel within 2 years.

Philadelphia moved its convention center to Center City in 2004....and was quickly followed by new hotels, dining, and entertainment spots....so much that the City was selected to host the 2000 Republican National Convention

[thelakelander]

San Diego is another city where the proper integration of a convention center has helped fuel downtown redevelopment.  The truth is, there is no single shot in the arm solution for downtown revitalization.  However, when you cluster several complementing uses together, the same things that will struggle on their own in isolation have the ability to stimulate vibrancy rapidly as a whole.

[Cricket]

Tufsu, you gave two examples of cities that had revitalization plans in place that were implemented almost simultaneously, the convention center being, not the result, but a component of that revitalization effort.

My point is that the building of a new convention center will not in itself instigate a need for conventions. Therein lies the dilemma for Jacksonville. Our city leaders lack neither foresight nor plans. They are like the jockey that is stuck way in the back of the pack.

[tufsu1]

I think we already have the necessary assets to attract conventions....with the glaring exception of a quality convention center facility

[thelakelander]

We already attract conventions.  The issue for the future is investing in ourselves to maintain and enhance our potential in this area (and spin off business opportunities) or doing nothing and losing the events we currently host.