PHILADELPHIA | W Hotel & Element by Westin | 617 FT | 51 FLOORS - Page 25

Cro Burnham · #**481** Posted **Dec 4, 2014, 5:07 PM**

Quote:

Originally Posted by 1487

of course not. Same parking lot we've seen for years.

I heard on the street the Chinese backed out once they saw photos of the Wendy's across the street.

Just kidding.

Seriously, my understanding is that the EB-5 program has essentially been structured as construction/bridge financing. I.e., individual investors put up $500K or so for 2 - 5 years. At the end of that term, permanent financing comes in and repays the the EB-5 investment, and the investors get their green cards.

Apparently EB-5 requires minimal interest. So the main advantage to the developer for using it is that it saves tons in construction interest cost, and therefore reduces the permanent takeout financing need commensurately (i.e., by the amount of interest savings).

But like a construction lender, the immigrant investors want their money back quickly and need to see a very strong commitment for permanent financing. That's why they love government-funded projects like the Turnpike/I-95 interchange, which already has permanent funding committed by a very reliable source (i.e., the Commonwealth).

Apparently, EB-5 also provided construction funding for the public portions of the Comcast Center.

But the W Hotel is a bit more speculative than those projects. Who knows how firm the permanent funding commitments are? Plus, the TIF and HUD108 components make the whole thing more complicated. Complicated means there are more things that can go wrong before the permanent lender has to step in, and that tends to scare short term investors.

So EB-5 may be a hard sell for the W. But it's possible that EB-5 is being pursued less for the interest savings and more because conventional construction lenders might be even more unsure about lending the needed amount of construction funding.

The delays suggest to me that construction funders are nervous about the risks that can accrue prior to take-out by permanent financing. The main way to reduce exposure is to reduce the amount of construction financing. This would require the developer & partners to front more of the short term money, but then this typically severely thins the return on equity. Equity investors are all about adding leverage ("OPM") and boosting ROE, not the reverse.

So I suspect this kind of stuff might be the cause of some of the delay that we seem to be seeing.

My guess, anyhow.

GarCastle · #**482** Posted **Dec 4, 2014, 11:55 PM**

I would think the major clients signing up for future Convention Center gigs would help. Things like AHA 2019 with its projected 51,000 room-nights needed across the nights of the convention.

Cheers,
G.

Flyers2001 · #**483** Posted **Dec 5, 2014, 4:31 AM**

Quote:

Originally Posted by GarCastle

I would think the major clients signing up for future Convention Center gigs would help. Things like AHA 2019 with its projected 51,000 room-nights needed across the nights of the convention.

Cheers,
G.

I think you hit the nail on the head. There has been sufficient evidence over the last 3 months that the Convention Center is now going to be used the way it was envisioned when they expanded. Conventions like the AHA are looking to become the norm. This is huge for the tourist and hospitality industry. Philadelphia needs more hotel rooms, esp those close to the Convention Center. I would also favor Philadelphia winning the Democratic Convention.

Cro Burnham · #**484** Posted **Dec 5, 2014, 5:09 AM**

Projected convention bookings are good stuff. But I'm not sure low-risk, short-term EB-5 investors looking for a very safe exit strategy are considering such factors. Mainly what they'll want to see is a very tight commitment of permanent financing.

In fact, if permanent financing commitment is made contingent on the level of bookings at the convention center two or three years from now, I imagine that would make it pretty hard to secure sufficient construction financing.

1487 · #**485** Posted **Dec 5, 2014, 1:38 PM**

Quote:

Originally Posted by Cro Burnham

Projected convention bookings are good stuff. But I'm not sure low-risk, short-term EB-5 investors looking for a very safe exit strategy are considering such factors. Mainly what they'll want to see is a very tight commitment of permanent financing.

In fact, if permanent financing commitment is made contingent on the level of bookings at the convention center two or three years from now, I imagine that would make it pretty hard to secure sufficient construction financing.

when the public financing was sought we were left with the impression that it was the missing link in the package. Seems that wasnt the case and it was just presented that way in order to get quick passage in Council. That was about a year ago if I remember correctly and the developers indicated ground breaking would be only a few months away.

rricci · #**486** Posted **Dec 9, 2014, 9:29 AM**

Nanyika over at the Philadelphiaspeaks has this to say:

The word is that the W is supposed to break ground early in 2015, and start rising by around June. For weeks now, they've been hiring people for the June construction phase.

Can anyone cionfirm this?

boxbot · #**487** Posted **Dec 9, 2014, 3:57 PM**

Quote:

Originally Posted by rricci

Nanyika over at the Philadelphiaspeaks has this to say:

The word is that the W is supposed to break ground early in 2015, and start rising by around June. For weeks now, they've been hiring people for the June construction phase.

Can anyone cionfirm this?

Take a look back through this thread. No one can confirm and if they did, I wouldn't believe them. To recap:

November 2012: W is supposed to break ground in early 2013
August 2013: W is supposed to break ground in early 2014
January 2014: W is supposed to break ground in early 2014 (Lenfest himself)
June 2014: Wendy’s Wendy’s Wendy’s Wendy’s Wendy’s
July 2014: W is supposed to break ground in fall 2014
December 2014: W is supposed to break ground in early 2015

loves development · #**488** Posted **Dec 16, 2014, 3:51 PM**

Permit Number 563657

Application Type NEW CONSTRUCTION PERMIT

Permit Type ANC-FOUNDATION

Status ACTIVE

Date Issued November 12, 2014

Last Updated November 17, 2014

Work Description

REMOVAL OF PARKING SURFACE AND MISC ITEMS, BULK EXCAVATION OF BLDGS BASEMENT AND THE INSTALLATION OF TEMPORARY EXCAVATION SUPPORT SYSTEMS AND TIE BACK INDERPINNING. INSTALLATION OF BLDGS MAT SLAB FOUNDATION.

Contractor Name
Contractor Address

TUTOR PERINI BUILDING CORP

THE PHOENIX
1600 ARCH ST; STE 300
PHILADELPHIA, PA 19103

Cro Burnham · #**489** Posted **Dec 16, 2014, 5:45 PM**

Promising.

1487 · #**490** Posted **Dec 19, 2014, 4:17 PM**

finally some real sign of action. I walked past there 2 day ago and saw nothing new. Not even a sign mentioning closing of the parking lot.

Philly-Drew · #**491** Posted **Dec 19, 2014, 11:51 PM**

Loves development, only 7 posts? What a splash on this post. I am so excited for this project, and SLS (now that CITC and FMC has started).

To Cro Burnham's point, this is the most promising news about this project thus far, period.

Fingers crossed!

jsbrook · #**492** Posted **Dec 20, 2014, 7:19 PM**

Quote:

Originally Posted by Philadelcago

this rendering is at the bottom of the planphilly article linked from last page, is this not the latest?

If this is moving forward (and hopefully it is) I hope this remains the design and that it hasn't been altered for cost reasons.

iheartphilly · #**493** Posted **Dec 23, 2014, 10:49 PM**

Starwood sells its Philly airport hotels; Lightstone buys 2 for $22M
. Could this be a positive sign that the W/Element will get built>
See link:
http://www.philly.com/philly/blogs/inq-phillydeals/Philly-airport-hotels-sold.html

summersm343 · #**494** Posted **Dec 26, 2014, 7:15 PM**

Permits posted on the fence.

boxbot · #**495** Posted **Dec 26, 2014, 7:30 PM**

Quote:

Originally Posted by summersm343

Permits posted on the fence.

It's a Christmas miracle!

jsbrook · #**496** Posted **Dec 26, 2014, 7:42 PM**

Quote:

Originally Posted by boxbot

It's a Christmas miracle!

Woot! Finally. Great news!

1487 · #**497** Posted **Dec 26, 2014, 7:56 PM**

What I would like to see is something indicating a close date on that parking lot. Im sure many center city drivers are going to be upset to see that prime lot disappear- its always at capacity.

jsbrook · #**498** Posted **Dec 26, 2014, 11:37 PM**

Quote:

Originally Posted by jsbrook

Woot! Finally. Great news!

Permit issuance date says 11/12/2014.

Philly-Drew · #**499** Posted **Dec 27, 2014, 4:23 PM**

Quote:

Originally Posted by 1487

What I would like to see is something indicating a close date on that parking lot. Im sure many center city drivers are going to be upset to see that prime lot disappear- its always at capacity.

1487, I'm not arguing or anything, and I respect the opinion of others even if I don't agree with them. This however is a skyscraper website, with heavy discussion on urban development. I would think that most of us are jumping up and down that a surface parking lot in a prime location is going away, especially for a building like the one in the recent renderings. Surface parking lots are an absolute terrible use of urban space.

Why do you have concern over the lot and the people parking in it? There are other lots downtown. People can park in one of the other lots, or take public transportation.

You have me really confused dude.

MusicMan84 · #**500** Posted **Dec 27, 2014, 4:29 PM**

Quote:

Originally Posted by Philly-Drew

1487, I'm not arguing or anything, and I respect the opinion of others even if I don't agree with them. This however is a skyscraper website, with heavy discussion on urban development. I would think that most of us are jumping up and down that a surface parking lot in a prime location is going away, especially for a building like the one in the recent renderings. Surface parking lots are an absolute terrible use of urban space.

Why do you have concern over the lot and the people parking in it? There are other lots downtown. People can park in one of the other lots, or take public transportation.

You have me really confused dude.

I think it is quite possible 1487 is just pointing out that a closure notice on the parking lot would be another progress indicator to look for. Another sign of this moving forward.