Developer births CityScape, provides new life to other projects

Early most weekday mornings, Michael Ebert can be found walking around CityScape in downtown Phoenix. The managing partner of RED Development usually buys a cup of coffee at Chloe’s Corner or a meal at the Breakfast Club.

Then Ebert checks on the construction of apartments going up on top of the Kimpton Hotel Palomar and often steps into the hotel’s restaurant, Blue Hound Kitchen, to see what the lunch specials are. From there, he may walk past retailer Urban Outfitters and others, both window-shopping for his kids and mentally logging how many customers are out already.

Read more...Developer births CityScape, provides new life to other projects

CityScape developer snaps up Borgata

RED Development has added to its recent acquisitions by purchasing the Borgata of Scottsdale shopping center for $9.15 million from Macerich Co.

The Borgata at Scottsdale Road and Rose Lane is a specialty center built in 1981 to resemble the Italian village of San Gimignano. It offers 94,000 square feet of retail space, including the Blanco Tacos and J. Alexander's restaurants and the Dolce Salon and Spa.

"We are very pleased to have acquired this well-situated and high-quality property in Scottsdale, a tremendous market for retail performance," said Mike Ebert, RED managing partner.

RED Development, based in Phoenix, has been actively acquiring property in addition to developing CityScape in downtown Phoenix.

Last month, RED Development and Cole Real Estate Investments teamed up to buy Macerich's 50 percent stake in the Chandler Village Center and Chandler Festival power centers for $45.8 million.

RED also bought the Shops at Prescott Gateway and the Aspen Place at the Sawmill retail center in Flagstaff within the past year.

The Borgata acquisition is part of RED's growth strategy, Ebert said.

"We look forward to working with the unique retailers and restaurants at the property and applying RED's creative approach to the future of the real estate," he said.

The Borgata has vacancies, but RED Development declined to disclose its occupancy rate at the time of the sale. The deal closed earlier this week.

It did not include the nearby Shops at Hilton Village, on the opposite side of Scottsdale Road from the Borgata, which Macerich also manages. Macerich, of Santa Monica, Calif., is the parent company of Westcor, the Valley's largest mall developer and operator. Company executives could not be reached for comment.

by Peter Corbett - May. 4, 2012 04:29 PM The Republic | azcentral.com




CityScape developer snaps up Borgata

CityScape developer snaps up Borgata

RED Development has added to its recent acquisitions by purchasing the Borgata of Scottsdale shopping center for $9.15 million from Macerich Co.

The Borgata at Scottsdale Road and Rose Lane is a specialty center built in 1981 to resemble the Italian village of San Gimignano. It offers 94,000 square feet of retail space, including the Blanco Tacos and J. Alexander's restaurants and the Dolce Salon and Spa.

"We are very pleased to have acquired this well-situated and high-quality property in Scottsdale, a tremendous market for retail performance," said Mike Ebert, RED managing partner.

RED Development, based in Phoenix, has been actively acquiring property in addition to developing CityScape in downtown Phoenix.

Last month, RED Development and Cole Real Estate Investments teamed up to buy Macerich's 50 percent stake in the Chandler Village Center and Chandler Festival power centers for $45.8 million.

RED also bought the Shops at Prescott Gateway and the Aspen Place at the Sawmill retail center in Flagstaff within the past year.

The Borgata acquisition is part of RED's growth strategy, Ebert said.

"We look forward to working with the unique retailers and restaurants at the property and applying RED's creative approach to the future of the real estate," he said.

The Borgata has vacancies, but RED Development declined to disclose its occupancy rate at the time of the sale. The deal closed earlier this week.

It did not include the nearby Shops at Hilton Village, on the opposite side of Scottsdale Road from the Borgata, which Macerich also manages. Macerich, of Santa Monica, Calif., is the parent company of Westcor, the Valley's largest mall developer and operator. Company executives could not be reached for comment.

by Peter Corbett - May. 4, 2012 04:29 PM The Republic | azcentral.com




CityScape developer snaps up Borgata

CityScape developer snaps up Borgata

RED Development has added to its recent acquisitions by purchasing the Borgata of Scottsdale shopping center for $9.15 million from Macerich Co.

The Borgata at Scottsdale Road and Rose Lane is a specialty center built in 1981 to resemble the Italian village of San Gimignano. It offers 94,000 square feet of retail space, including the Blanco Tacos and J. Alexander's restaurants and the Dolce Salon and Spa.

"We are very pleased to have acquired this well-situated and high-quality property in Scottsdale, a tremendous market for retail performance," said Mike Ebert, RED managing partner.

RED Development, based in Phoenix, has been actively acquiring property in addition to developing CityScape in downtown Phoenix.

Last month, RED Development and Cole Real Estate Investments teamed up to buy Macerich's 50 percent stake in the Chandler Village Center and Chandler Festival power centers for $45.8 million.

RED also bought the Shops at Prescott Gateway and the Aspen Place at the Sawmill retail center in Flagstaff within the past year.

The Borgata acquisition is part of RED's growth strategy, Ebert said.

"We look forward to working with the unique retailers and restaurants at the property and applying RED's creative approach to the future of the real estate," he said.

The Borgata has vacancies, but RED Development declined to disclose its occupancy rate at the time of the sale. The deal closed earlier this week.

It did not include the nearby Shops at Hilton Village, on the opposite side of Scottsdale Road from the Borgata, which Macerich also manages. Macerich, of Santa Monica, Calif., is the parent company of Westcor, the Valley's largest mall developer and operator. Company executives could not be reached for comment.

by Peter Corbett - May. 4, 2012 04:29 PM The Republic | azcentral.com




CityScape developer snaps up Borgata

CityScape developer snaps up Borgata

RED Development has added to its recent acquisitions by purchasing the Borgata of Scottsdale shopping center for $9.15 million from Macerich Co.

The Borgata at Scottsdale Road and Rose Lane is a specialty center built in 1981 to resemble the Italian village of San Gimignano. It offers 94,000 square feet of retail space, including the Blanco Tacos and J. Alexander's restaurants and the Dolce Salon and Spa.

"We are very pleased to have acquired this well-situated and high-quality property in Scottsdale, a tremendous market for retail performance," said Mike Ebert, RED managing partner.

RED Development, based in Phoenix, has been actively acquiring property in addition to developing CityScape in downtown Phoenix.

Last month, RED Development and Cole Real Estate Investments teamed up to buy Macerich's 50 percent stake in the Chandler Village Center and Chandler Festival power centers for $45.8 million.

RED also bought the Shops at Prescott Gateway and the Aspen Place at the Sawmill retail center in Flagstaff within the past year.

The Borgata acquisition is part of RED's growth strategy, Ebert said.

"We look forward to working with the unique retailers and restaurants at the property and applying RED's creative approach to the future of the real estate," he said.

The Borgata has vacancies, but RED Development declined to disclose its occupancy rate at the time of the sale. The deal closed earlier this week.

It did not include the nearby Shops at Hilton Village, on the opposite side of Scottsdale Road from the Borgata, which Macerich also manages. Macerich, of Santa Monica, Calif., is the parent company of Westcor, the Valley's largest mall developer and operator. Company executives could not be reached for comment.

by Peter Corbett - May. 4, 2012 04:29 PM The Republic | azcentral.com




CityScape developer snaps up Borgata

CityScape developer snaps up Borgata

RED Development has added to its recent acquisitions by purchasing the Borgata of Scottsdale shopping center for $9.15 million from Macerich Co.

The Borgata at Scottsdale Road and Rose Lane is a specialty center built in 1981 to resemble the Italian village of San Gimignano. It offers 94,000 square feet of retail space, including the Blanco Tacos and J. Alexander's restaurants and the Dolce Salon and Spa.

"We are very pleased to have acquired this well-situated and high-quality property in Scottsdale, a tremendous market for retail performance," said Mike Ebert, RED managing partner.

RED Development, based in Phoenix, has been actively acquiring property in addition to developing CityScape in downtown Phoenix.

Last month, RED Development and Cole Real Estate Investments teamed up to buy Macerich's 50 percent stake in the Chandler Village Center and Chandler Festival power centers for $45.8 million.

RED also bought the Shops at Prescott Gateway and the Aspen Place at the Sawmill retail center in Flagstaff within the past year.

The Borgata acquisition is part of RED's growth strategy, Ebert said.

"We look forward to working with the unique retailers and restaurants at the property and applying RED's creative approach to the future of the real estate," he said.

The Borgata has vacancies, but RED Development declined to disclose its occupancy rate at the time of the sale. The deal closed earlier this week.

It did not include the nearby Shops at Hilton Village, on the opposite side of Scottsdale Road from the Borgata, which Macerich also manages. Macerich, of Santa Monica, Calif., is the parent company of Westcor, the Valley's largest mall developer and operator. Company executives could not be reached for comment.

by Peter Corbett - May. 4, 2012 04:29 PM The Republic | azcentral.com




CityScape developer snaps up Borgata

CityScape developer snaps up Borgata

RED Development has added to its recent acquisitions by purchasing the Borgata of Scottsdale shopping center for $9.15 million from Macerich Co.

The Borgata at Scottsdale Road and Rose Lane is a specialty center built in 1981 to resemble the Italian village of San Gimignano. It offers 94,000 square feet of retail space, including the Blanco Tacos and J. Alexander's restaurants and the Dolce Salon and Spa.

"We are very pleased to have acquired this well-situated and high-quality property in Scottsdale, a tremendous market for retail performance," said Mike Ebert, RED managing partner.

RED Development, based in Phoenix, has been actively acquiring property in addition to developing CityScape in downtown Phoenix.

Last month, RED Development and Cole Real Estate Investments teamed up to buy Macerich's 50 percent stake in the Chandler Village Center and Chandler Festival power centers for $45.8 million.

RED also bought the Shops at Prescott Gateway and the Aspen Place at the Sawmill retail center in Flagstaff within the past year.

The Borgata acquisition is part of RED's growth strategy, Ebert said.

"We look forward to working with the unique retailers and restaurants at the property and applying RED's creative approach to the future of the real estate," he said.

The Borgata has vacancies, but RED Development declined to disclose its occupancy rate at the time of the sale. The deal closed earlier this week.

It did not include the nearby Shops at Hilton Village, on the opposite side of Scottsdale Road from the Borgata, which Macerich also manages. Macerich, of Santa Monica, Calif., is the parent company of Westcor, the Valley's largest mall developer and operator. Company executives could not be reached for comment.

by Peter Corbett - May. 4, 2012 04:29 PM The Republic | azcentral.com




CityScape developer snaps up Borgata

CityScape developer snaps up Borgata

RED Development has added to its recent acquisitions by purchasing the Borgata of Scottsdale shopping center for $9.15 million from Macerich Co.

The Borgata at Scottsdale Road and Rose Lane is a specialty center built in 1981 to resemble the Italian village of San Gimignano. It offers 94,000 square feet of retail space, including the Blanco Tacos and J. Alexander's restaurants and the Dolce Salon and Spa.

"We are very pleased to have acquired this well-situated and high-quality property in Scottsdale, a tremendous market for retail performance," said Mike Ebert, RED managing partner.

RED Development, based in Phoenix, has been actively acquiring property in addition to developing CityScape in downtown Phoenix.

Last month, RED Development and Cole Real Estate Investments teamed up to buy Macerich's 50 percent stake in the Chandler Village Center and Chandler Festival power centers for $45.8 million.

RED also bought the Shops at Prescott Gateway and the Aspen Place at the Sawmill retail center in Flagstaff within the past year.

The Borgata acquisition is part of RED's growth strategy, Ebert said.

"We look forward to working with the unique retailers and restaurants at the property and applying RED's creative approach to the future of the real estate," he said.

The Borgata has vacancies, but RED Development declined to disclose its occupancy rate at the time of the sale. The deal closed earlier this week.

It did not include the nearby Shops at Hilton Village, on the opposite side of Scottsdale Road from the Borgata, which Macerich also manages. Macerich, of Santa Monica, Calif., is the parent company of Westcor, the Valley's largest mall developer and operator. Company executives could not be reached for comment.

by Peter Corbett - May. 4, 2012 04:29 PM The Republic | azcentral.com




CityScape developer snaps up Borgata

Hotel Palomar in downtown Phoenix almost complete

Tom Tingle/The Republic This is the Hotel Palomar under construction in downtown Phoenix. View is from Central and Jefferson.




Years of construction at First and Jefferson streets in downtown Phoenix are about to end at the CityScape office-and-retail project as construction crews complete the Hotel Palomar Phoenix.

The $90 million, 242-room boutique hotel in the RED Development project officially opens June 5. It joins the Hotel San Carlos, Hyatt Regency Phoenix, Renaissance Phoenix Hotel, Sheraton Phoenix Downtown Hotel and the Westin Phoenix Downtown in the lineup of downtown hotels.

Jim Hollister, general manager of the new hotel, said other hoteliers in the area have been welcoming to the Palomar, even though it will bring them new competition.

"We are fighting for the same business in summer," Hollister said.

CityScape general manager Jeff Moloznik said the Hotel Palomar will give Phoenix more leverage when courting large national conferences and events, such as the Super Bowl, which will be held at the University of Phoenix Stadium in 2015, with fan events at CityScape.

"But we're also competing together as a group nationally for conventions," Moloznik said.

Phoenix officials have said the city needs more hotels downtown to support the large-scale conventions they have been drawing to the Phoenix Convention Center, a few blocks from CityScape.

An estimated 195,750 people are expected to attend the center's conferences this year -- which amounts to nearly 276,000 room nights in local hotels, according to the Greater Phoenix Convention and Visitors Bureau and convention-center officials.

Those convention attendees are expected to spend more than $283 million during the year on food, drinks, rooms, souvenirs and entertainment.

The Palomar in Phoenix, a Kimpton hotel, would be an attractive option for conventioneers, and it could be a selling point for associations and other national groups that are deciding where to hold their next annual conventions, said Jennifer Franklin, a spokeswoman for the hotel.

Franklin also said Kimpton hotels have a loyal customer following, especially among women, which makes it an attractive brand for cities to acquire.

The Hotel Palomar Phoenix is the second hotel that Kimpton Hotels and Restaurants has built from scratch, Hollister said. The other is the Hotel Palomar in Chicago. The company usually adds hotels through "adaptive reuse" -- renovating existing buildings.

Moloznik said the Hotel Palomar Phoenix boasts energy efficiency and recycled materials that may enable it -- and all of CityScape's two blocks of stores, restaurants and offices -- to qualify for the prestigious LEED certification, the international hallmark of green design and construction.

In addition, it already meets Kimpton's standards for green building under its 7-year-old green building program, EarthCare -- another selling point for the environmentally conscientious customer.

The hotel's 242 rooms are decked in chic neutral tones -- espresso brown; gray beaded wallpaper; beige-colored, croc-textured doors on the wardrobes; and stainless-steel fixtures. The furniture has crisp, straight edges, but pillows and other accessories soften the sharpness. Nightly room rates start at $149.

"It's like that show 'Mad Men,' " Hollister said, referring to the popular AMC television show set in the early 1960s, when interior design was markedly minimalist with stark, contrasting colors.

A one-bedroom unit features a separate sitting room. Each bathroom has a Fuji soak tub.

A 3,200-square-foot ballroom will play host to conferences, banquets and celebrations. Boardrooms also can be set up in the meeting spaces. Altogether, the hotel offers more than 15,000 square feet of meeting space.

Construction crews are putting the finishing touches on two bars. One, on the second floor of the hotel, is the Blue Hound Kitchen & Cocktails bar, where Palomar guests will be invited to a "Wines of the World" hour at 5 p.m. daily. Room service also is available 24 hours a day.

The outdoor pool is on the third floor, where guests can watch the crowds walking to and leaving concerts, Phoenix Suns, Mercury and Arizona Diamondbacks games. Another bar, Lustre, next to the pool will be open to the public.

Guests hoping to squeeze in a workout will get complimentary passes to Gold's Gym Elite at CityScape.

Hollister said the hotel has been hosting job fairs at the CityScape office tower to hire 250 workers, from cleaning crews to managers.

by Emily Gersema - Apr. 28, 2012 04:35 PM The Republic | azcentral.com



Hotel Palomar in downtown Phoenix almost complete

Hotel Palomar in downtown Phoenix almost complete

Tom Tingle/The Republic This is the Hotel Palomar under construction in downtown Phoenix. View is from Central and Jefferson.




Years of construction at First and Jefferson streets in downtown Phoenix are about to end at the CityScape office-and-retail project as construction crews complete the Hotel Palomar Phoenix.

The $90 million, 242-room boutique hotel in the RED Development project officially opens June 5. It joins the Hotel San Carlos, Hyatt Regency Phoenix, Renaissance Phoenix Hotel, Sheraton Phoenix Downtown Hotel and the Westin Phoenix Downtown in the lineup of downtown hotels.

Jim Hollister, general manager of the new hotel, said other hoteliers in the area have been welcoming to the Palomar, even though it will bring them new competition.

"We are fighting for the same business in summer," Hollister said.

CityScape general manager Jeff Moloznik said the Hotel Palomar will give Phoenix more leverage when courting large national conferences and events, such as the Super Bowl, which will be held at the University of Phoenix Stadium in 2015, with fan events at CityScape.

"But we're also competing together as a group nationally for conventions," Moloznik said.

Phoenix officials have said the city needs more hotels downtown to support the large-scale conventions they have been drawing to the Phoenix Convention Center, a few blocks from CityScape.

An estimated 195,750 people are expected to attend the center's conferences this year -- which amounts to nearly 276,000 room nights in local hotels, according to the Greater Phoenix Convention and Visitors Bureau and convention-center officials.

Those convention attendees are expected to spend more than $283 million during the year on food, drinks, rooms, souvenirs and entertainment.

The Palomar in Phoenix, a Kimpton hotel, would be an attractive option for conventioneers, and it could be a selling point for associations and other national groups that are deciding where to hold their next annual conventions, said Jennifer Franklin, a spokeswoman for the hotel.

Franklin also said Kimpton hotels have a loyal customer following, especially among women, which makes it an attractive brand for cities to acquire.

The Hotel Palomar Phoenix is the second hotel that Kimpton Hotels and Restaurants has built from scratch, Hollister said. The other is the Hotel Palomar in Chicago. The company usually adds hotels through "adaptive reuse" -- renovating existing buildings.

Moloznik said the Hotel Palomar Phoenix boasts energy efficiency and recycled materials that may enable it -- and all of CityScape's two blocks of stores, restaurants and offices -- to qualify for the prestigious LEED certification, the international hallmark of green design and construction.

In addition, it already meets Kimpton's standards for green building under its 7-year-old green building program, EarthCare -- another selling point for the environmentally conscientious customer.

The hotel's 242 rooms are decked in chic neutral tones -- espresso brown; gray beaded wallpaper; beige-colored, croc-textured doors on the wardrobes; and stainless-steel fixtures. The furniture has crisp, straight edges, but pillows and other accessories soften the sharpness. Nightly room rates start at $149.

"It's like that show 'Mad Men,' " Hollister said, referring to the popular AMC television show set in the early 1960s, when interior design was markedly minimalist with stark, contrasting colors.

A one-bedroom unit features a separate sitting room. Each bathroom has a Fuji soak tub.

A 3,200-square-foot ballroom will play host to conferences, banquets and celebrations. Boardrooms also can be set up in the meeting spaces. Altogether, the hotel offers more than 15,000 square feet of meeting space.

Construction crews are putting the finishing touches on two bars. One, on the second floor of the hotel, is the Blue Hound Kitchen & Cocktails bar, where Palomar guests will be invited to a "Wines of the World" hour at 5 p.m. daily. Room service also is available 24 hours a day.

The outdoor pool is on the third floor, where guests can watch the crowds walking to and leaving concerts, Phoenix Suns, Mercury and Arizona Diamondbacks games. Another bar, Lustre, next to the pool will be open to the public.

Guests hoping to squeeze in a workout will get complimentary passes to Gold's Gym Elite at CityScape.

Hollister said the hotel has been hosting job fairs at the CityScape office tower to hire 250 workers, from cleaning crews to managers.

by Emily Gersema - Apr. 28, 2012 04:35 PM The Republic | azcentral.com



Hotel Palomar in downtown Phoenix almost complete

Hotel Palomar in downtown Phoenix almost complete

Tom Tingle/The Republic This is the Hotel Palomar under construction in downtown Phoenix. View is from Central and Jefferson.




Years of construction at First and Jefferson streets in downtown Phoenix are about to end at the CityScape office-and-retail project as construction crews complete the Hotel Palomar Phoenix.

The $90 million, 242-room boutique hotel in the RED Development project officially opens June 5. It joins the Hotel San Carlos, Hyatt Regency Phoenix, Renaissance Phoenix Hotel, Sheraton Phoenix Downtown Hotel and the Westin Phoenix Downtown in the lineup of downtown hotels.

Jim Hollister, general manager of the new hotel, said other hoteliers in the area have been welcoming to the Palomar, even though it will bring them new competition.

"We are fighting for the same business in summer," Hollister said.

CityScape general manager Jeff Moloznik said the Hotel Palomar will give Phoenix more leverage when courting large national conferences and events, such as the Super Bowl, which will be held at the University of Phoenix Stadium in 2015, with fan events at CityScape.

"But we're also competing together as a group nationally for conventions," Moloznik said.

Phoenix officials have said the city needs more hotels downtown to support the large-scale conventions they have been drawing to the Phoenix Convention Center, a few blocks from CityScape.

An estimated 195,750 people are expected to attend the center's conferences this year -- which amounts to nearly 276,000 room nights in local hotels, according to the Greater Phoenix Convention and Visitors Bureau and convention-center officials.

Those convention attendees are expected to spend more than $283 million during the year on food, drinks, rooms, souvenirs and entertainment.

The Palomar in Phoenix, a Kimpton hotel, would be an attractive option for conventioneers, and it could be a selling point for associations and other national groups that are deciding where to hold their next annual conventions, said Jennifer Franklin, a spokeswoman for the hotel.

Franklin also said Kimpton hotels have a loyal customer following, especially among women, which makes it an attractive brand for cities to acquire.

The Hotel Palomar Phoenix is the second hotel that Kimpton Hotels and Restaurants has built from scratch, Hollister said. The other is the Hotel Palomar in Chicago. The company usually adds hotels through "adaptive reuse" -- renovating existing buildings.

Moloznik said the Hotel Palomar Phoenix boasts energy efficiency and recycled materials that may enable it -- and all of CityScape's two blocks of stores, restaurants and offices -- to qualify for the prestigious LEED certification, the international hallmark of green design and construction.

In addition, it already meets Kimpton's standards for green building under its 7-year-old green building program, EarthCare -- another selling point for the environmentally conscientious customer.

The hotel's 242 rooms are decked in chic neutral tones -- espresso brown; gray beaded wallpaper; beige-colored, croc-textured doors on the wardrobes; and stainless-steel fixtures. The furniture has crisp, straight edges, but pillows and other accessories soften the sharpness. Nightly room rates start at $149.

"It's like that show 'Mad Men,' " Hollister said, referring to the popular AMC television show set in the early 1960s, when interior design was markedly minimalist with stark, contrasting colors.

A one-bedroom unit features a separate sitting room. Each bathroom has a Fuji soak tub.

A 3,200-square-foot ballroom will play host to conferences, banquets and celebrations. Boardrooms also can be set up in the meeting spaces. Altogether, the hotel offers more than 15,000 square feet of meeting space.

Construction crews are putting the finishing touches on two bars. One, on the second floor of the hotel, is the Blue Hound Kitchen & Cocktails bar, where Palomar guests will be invited to a "Wines of the World" hour at 5 p.m. daily. Room service also is available 24 hours a day.

The outdoor pool is on the third floor, where guests can watch the crowds walking to and leaving concerts, Phoenix Suns, Mercury and Arizona Diamondbacks games. Another bar, Lustre, next to the pool will be open to the public.

Guests hoping to squeeze in a workout will get complimentary passes to Gold's Gym Elite at CityScape.

Hollister said the hotel has been hosting job fairs at the CityScape office tower to hire 250 workers, from cleaning crews to managers.

by Emily Gersema - Apr. 28, 2012 04:35 PM The Republic | azcentral.com



Hotel Palomar in downtown Phoenix almost complete

Hotel Palomar in downtown Phoenix almost complete

Tom Tingle/The Republic This is the Hotel Palomar under construction in downtown Phoenix. View is from Central and Jefferson.




Years of construction at First and Jefferson streets in downtown Phoenix are about to end at the CityScape office-and-retail project as construction crews complete the Hotel Palomar Phoenix.

The $90 million, 242-room boutique hotel in the RED Development project officially opens June 5. It joins the Hotel San Carlos, Hyatt Regency Phoenix, Renaissance Phoenix Hotel, Sheraton Phoenix Downtown Hotel and the Westin Phoenix Downtown in the lineup of downtown hotels.

Jim Hollister, general manager of the new hotel, said other hoteliers in the area have been welcoming to the Palomar, even though it will bring them new competition.

"We are fighting for the same business in summer," Hollister said.

CityScape general manager Jeff Moloznik said the Hotel Palomar will give Phoenix more leverage when courting large national conferences and events, such as the Super Bowl, which will be held at the University of Phoenix Stadium in 2015, with fan events at CityScape.

"But we're also competing together as a group nationally for conventions," Moloznik said.

Phoenix officials have said the city needs more hotels downtown to support the large-scale conventions they have been drawing to the Phoenix Convention Center, a few blocks from CityScape.

An estimated 195,750 people are expected to attend the center's conferences this year -- which amounts to nearly 276,000 room nights in local hotels, according to the Greater Phoenix Convention and Visitors Bureau and convention-center officials.

Those convention attendees are expected to spend more than $283 million during the year on food, drinks, rooms, souvenirs and entertainment.

The Palomar in Phoenix, a Kimpton hotel, would be an attractive option for conventioneers, and it could be a selling point for associations and other national groups that are deciding where to hold their next annual conventions, said Jennifer Franklin, a spokeswoman for the hotel.

Franklin also said Kimpton hotels have a loyal customer following, especially among women, which makes it an attractive brand for cities to acquire.

The Hotel Palomar Phoenix is the second hotel that Kimpton Hotels and Restaurants has built from scratch, Hollister said. The other is the Hotel Palomar in Chicago. The company usually adds hotels through "adaptive reuse" -- renovating existing buildings.

Moloznik said the Hotel Palomar Phoenix boasts energy efficiency and recycled materials that may enable it -- and all of CityScape's two blocks of stores, restaurants and offices -- to qualify for the prestigious LEED certification, the international hallmark of green design and construction.

In addition, it already meets Kimpton's standards for green building under its 7-year-old green building program, EarthCare -- another selling point for the environmentally conscientious customer.

The hotel's 242 rooms are decked in chic neutral tones -- espresso brown; gray beaded wallpaper; beige-colored, croc-textured doors on the wardrobes; and stainless-steel fixtures. The furniture has crisp, straight edges, but pillows and other accessories soften the sharpness. Nightly room rates start at $149.

"It's like that show 'Mad Men,' " Hollister said, referring to the popular AMC television show set in the early 1960s, when interior design was markedly minimalist with stark, contrasting colors.

A one-bedroom unit features a separate sitting room. Each bathroom has a Fuji soak tub.

A 3,200-square-foot ballroom will play host to conferences, banquets and celebrations. Boardrooms also can be set up in the meeting spaces. Altogether, the hotel offers more than 15,000 square feet of meeting space.

Construction crews are putting the finishing touches on two bars. One, on the second floor of the hotel, is the Blue Hound Kitchen & Cocktails bar, where Palomar guests will be invited to a "Wines of the World" hour at 5 p.m. daily. Room service also is available 24 hours a day.

The outdoor pool is on the third floor, where guests can watch the crowds walking to and leaving concerts, Phoenix Suns, Mercury and Arizona Diamondbacks games. Another bar, Lustre, next to the pool will be open to the public.

Guests hoping to squeeze in a workout will get complimentary passes to Gold's Gym Elite at CityScape.

Hollister said the hotel has been hosting job fairs at the CityScape office tower to hire 250 workers, from cleaning crews to managers.

by Emily Gersema - Apr. 28, 2012 04:35 PM The Republic | azcentral.com



Hotel Palomar in downtown Phoenix almost complete

Hotel Palomar in downtown Phoenix almost complete

Tom Tingle/The Republic This is the Hotel Palomar under construction in downtown Phoenix. View is from Central and Jefferson.




Years of construction at First and Jefferson streets in downtown Phoenix are about to end at the CityScape office-and-retail project as construction crews complete the Hotel Palomar Phoenix.

The $90 million, 242-room boutique hotel in the RED Development project officially opens June 5. It joins the Hotel San Carlos, Hyatt Regency Phoenix, Renaissance Phoenix Hotel, Sheraton Phoenix Downtown Hotel and the Westin Phoenix Downtown in the lineup of downtown hotels.

Jim Hollister, general manager of the new hotel, said other hoteliers in the area have been welcoming to the Palomar, even though it will bring them new competition.

"We are fighting for the same business in summer," Hollister said.

CityScape general manager Jeff Moloznik said the Hotel Palomar will give Phoenix more leverage when courting large national conferences and events, such as the Super Bowl, which will be held at the University of Phoenix Stadium in 2015, with fan events at CityScape.

"But we're also competing together as a group nationally for conventions," Moloznik said.

Phoenix officials have said the city needs more hotels downtown to support the large-scale conventions they have been drawing to the Phoenix Convention Center, a few blocks from CityScape.

An estimated 195,750 people are expected to attend the center's conferences this year -- which amounts to nearly 276,000 room nights in local hotels, according to the Greater Phoenix Convention and Visitors Bureau and convention-center officials.

Those convention attendees are expected to spend more than $283 million during the year on food, drinks, rooms, souvenirs and entertainment.

The Palomar in Phoenix, a Kimpton hotel, would be an attractive option for conventioneers, and it could be a selling point for associations and other national groups that are deciding where to hold their next annual conventions, said Jennifer Franklin, a spokeswoman for the hotel.

Franklin also said Kimpton hotels have a loyal customer following, especially among women, which makes it an attractive brand for cities to acquire.

The Hotel Palomar Phoenix is the second hotel that Kimpton Hotels and Restaurants has built from scratch, Hollister said. The other is the Hotel Palomar in Chicago. The company usually adds hotels through "adaptive reuse" -- renovating existing buildings.

Moloznik said the Hotel Palomar Phoenix boasts energy efficiency and recycled materials that may enable it -- and all of CityScape's two blocks of stores, restaurants and offices -- to qualify for the prestigious LEED certification, the international hallmark of green design and construction.

In addition, it already meets Kimpton's standards for green building under its 7-year-old green building program, EarthCare -- another selling point for the environmentally conscientious customer.

The hotel's 242 rooms are decked in chic neutral tones -- espresso brown; gray beaded wallpaper; beige-colored, croc-textured doors on the wardrobes; and stainless-steel fixtures. The furniture has crisp, straight edges, but pillows and other accessories soften the sharpness. Nightly room rates start at $149.

"It's like that show 'Mad Men,' " Hollister said, referring to the popular AMC television show set in the early 1960s, when interior design was markedly minimalist with stark, contrasting colors.

A one-bedroom unit features a separate sitting room. Each bathroom has a Fuji soak tub.

A 3,200-square-foot ballroom will play host to conferences, banquets and celebrations. Boardrooms also can be set up in the meeting spaces. Altogether, the hotel offers more than 15,000 square feet of meeting space.

Construction crews are putting the finishing touches on two bars. One, on the second floor of the hotel, is the Blue Hound Kitchen & Cocktails bar, where Palomar guests will be invited to a "Wines of the World" hour at 5 p.m. daily. Room service also is available 24 hours a day.

The outdoor pool is on the third floor, where guests can watch the crowds walking to and leaving concerts, Phoenix Suns, Mercury and Arizona Diamondbacks games. Another bar, Lustre, next to the pool will be open to the public.

Guests hoping to squeeze in a workout will get complimentary passes to Gold's Gym Elite at CityScape.

Hollister said the hotel has been hosting job fairs at the CityScape office tower to hire 250 workers, from cleaning crews to managers.

by Emily Gersema - Apr. 28, 2012 04:35 PM The Republic | azcentral.com



Hotel Palomar in downtown Phoenix almost complete

Hotel Palomar in downtown Phoenix almost complete

Tom Tingle/The Republic This is the Hotel Palomar under construction in downtown Phoenix. View is from Central and Jefferson.




Years of construction at First and Jefferson streets in downtown Phoenix are about to end at the CityScape office-and-retail project as construction crews complete the Hotel Palomar Phoenix.

The $90 million, 242-room boutique hotel in the RED Development project officially opens June 5. It joins the Hotel San Carlos, Hyatt Regency Phoenix, Renaissance Phoenix Hotel, Sheraton Phoenix Downtown Hotel and the Westin Phoenix Downtown in the lineup of downtown hotels.

Jim Hollister, general manager of the new hotel, said other hoteliers in the area have been welcoming to the Palomar, even though it will bring them new competition.

"We are fighting for the same business in summer," Hollister said.

CityScape general manager Jeff Moloznik said the Hotel Palomar will give Phoenix more leverage when courting large national conferences and events, such as the Super Bowl, which will be held at the University of Phoenix Stadium in 2015, with fan events at CityScape.

"But we're also competing together as a group nationally for conventions," Moloznik said.

Phoenix officials have said the city needs more hotels downtown to support the large-scale conventions they have been drawing to the Phoenix Convention Center, a few blocks from CityScape.

An estimated 195,750 people are expected to attend the center's conferences this year -- which amounts to nearly 276,000 room nights in local hotels, according to the Greater Phoenix Convention and Visitors Bureau and convention-center officials.

Those convention attendees are expected to spend more than $283 million during the year on food, drinks, rooms, souvenirs and entertainment.

The Palomar in Phoenix, a Kimpton hotel, would be an attractive option for conventioneers, and it could be a selling point for associations and other national groups that are deciding where to hold their next annual conventions, said Jennifer Franklin, a spokeswoman for the hotel.

Franklin also said Kimpton hotels have a loyal customer following, especially among women, which makes it an attractive brand for cities to acquire.

The Hotel Palomar Phoenix is the second hotel that Kimpton Hotels and Restaurants has built from scratch, Hollister said. The other is the Hotel Palomar in Chicago. The company usually adds hotels through "adaptive reuse" -- renovating existing buildings.

Moloznik said the Hotel Palomar Phoenix boasts energy efficiency and recycled materials that may enable it -- and all of CityScape's two blocks of stores, restaurants and offices -- to qualify for the prestigious LEED certification, the international hallmark of green design and construction.

In addition, it already meets Kimpton's standards for green building under its 7-year-old green building program, EarthCare -- another selling point for the environmentally conscientious customer.

The hotel's 242 rooms are decked in chic neutral tones -- espresso brown; gray beaded wallpaper; beige-colored, croc-textured doors on the wardrobes; and stainless-steel fixtures. The furniture has crisp, straight edges, but pillows and other accessories soften the sharpness. Nightly room rates start at $149.

"It's like that show 'Mad Men,' " Hollister said, referring to the popular AMC television show set in the early 1960s, when interior design was markedly minimalist with stark, contrasting colors.

A one-bedroom unit features a separate sitting room. Each bathroom has a Fuji soak tub.

A 3,200-square-foot ballroom will play host to conferences, banquets and celebrations. Boardrooms also can be set up in the meeting spaces. Altogether, the hotel offers more than 15,000 square feet of meeting space.

Construction crews are putting the finishing touches on two bars. One, on the second floor of the hotel, is the Blue Hound Kitchen & Cocktails bar, where Palomar guests will be invited to a "Wines of the World" hour at 5 p.m. daily. Room service also is available 24 hours a day.

The outdoor pool is on the third floor, where guests can watch the crowds walking to and leaving concerts, Phoenix Suns, Mercury and Arizona Diamondbacks games. Another bar, Lustre, next to the pool will be open to the public.

Guests hoping to squeeze in a workout will get complimentary passes to Gold's Gym Elite at CityScape.

Hollister said the hotel has been hosting job fairs at the CityScape office tower to hire 250 workers, from cleaning crews to managers.

by Emily Gersema - Apr. 28, 2012 04:35 PM The Republic | azcentral.com



Hotel Palomar in downtown Phoenix almost complete

Hotel Palomar in downtown Phoenix almost complete

Tom Tingle/The Republic This is the Hotel Palomar under construction in downtown Phoenix. View is from Central and Jefferson.




Years of construction at First and Jefferson streets in downtown Phoenix are about to end at the CityScape office-and-retail project as construction crews complete the Hotel Palomar Phoenix.

The $90 million, 242-room boutique hotel in the RED Development project officially opens June 5. It joins the Hotel San Carlos, Hyatt Regency Phoenix, Renaissance Phoenix Hotel, Sheraton Phoenix Downtown Hotel and the Westin Phoenix Downtown in the lineup of downtown hotels.

Jim Hollister, general manager of the new hotel, said other hoteliers in the area have been welcoming to the Palomar, even though it will bring them new competition.

"We are fighting for the same business in summer," Hollister said.

CityScape general manager Jeff Moloznik said the Hotel Palomar will give Phoenix more leverage when courting large national conferences and events, such as the Super Bowl, which will be held at the University of Phoenix Stadium in 2015, with fan events at CityScape.

"But we're also competing together as a group nationally for conventions," Moloznik said.

Phoenix officials have said the city needs more hotels downtown to support the large-scale conventions they have been drawing to the Phoenix Convention Center, a few blocks from CityScape.

An estimated 195,750 people are expected to attend the center's conferences this year -- which amounts to nearly 276,000 room nights in local hotels, according to the Greater Phoenix Convention and Visitors Bureau and convention-center officials.

Those convention attendees are expected to spend more than $283 million during the year on food, drinks, rooms, souvenirs and entertainment.

The Palomar in Phoenix, a Kimpton hotel, would be an attractive option for conventioneers, and it could be a selling point for associations and other national groups that are deciding where to hold their next annual conventions, said Jennifer Franklin, a spokeswoman for the hotel.

Franklin also said Kimpton hotels have a loyal customer following, especially among women, which makes it an attractive brand for cities to acquire.

The Hotel Palomar Phoenix is the second hotel that Kimpton Hotels and Restaurants has built from scratch, Hollister said. The other is the Hotel Palomar in Chicago. The company usually adds hotels through "adaptive reuse" -- renovating existing buildings.

Moloznik said the Hotel Palomar Phoenix boasts energy efficiency and recycled materials that may enable it -- and all of CityScape's two blocks of stores, restaurants and offices -- to qualify for the prestigious LEED certification, the international hallmark of green design and construction.

In addition, it already meets Kimpton's standards for green building under its 7-year-old green building program, EarthCare -- another selling point for the environmentally conscientious customer.

The hotel's 242 rooms are decked in chic neutral tones -- espresso brown; gray beaded wallpaper; beige-colored, croc-textured doors on the wardrobes; and stainless-steel fixtures. The furniture has crisp, straight edges, but pillows and other accessories soften the sharpness. Nightly room rates start at $149.

"It's like that show 'Mad Men,' " Hollister said, referring to the popular AMC television show set in the early 1960s, when interior design was markedly minimalist with stark, contrasting colors.

A one-bedroom unit features a separate sitting room. Each bathroom has a Fuji soak tub.

A 3,200-square-foot ballroom will play host to conferences, banquets and celebrations. Boardrooms also can be set up in the meeting spaces. Altogether, the hotel offers more than 15,000 square feet of meeting space.

Construction crews are putting the finishing touches on two bars. One, on the second floor of the hotel, is the Blue Hound Kitchen & Cocktails bar, where Palomar guests will be invited to a "Wines of the World" hour at 5 p.m. daily. Room service also is available 24 hours a day.

The outdoor pool is on the third floor, where guests can watch the crowds walking to and leaving concerts, Phoenix Suns, Mercury and Arizona Diamondbacks games. Another bar, Lustre, next to the pool will be open to the public.

Guests hoping to squeeze in a workout will get complimentary passes to Gold's Gym Elite at CityScape.

Hollister said the hotel has been hosting job fairs at the CityScape office tower to hire 250 workers, from cleaning crews to managers.

by Emily Gersema - Apr. 28, 2012 04:35 PM The Republic | azcentral.com



Hotel Palomar in downtown Phoenix almost complete

Hispanic organization loan brings CityScape hotel

The developer of the downtown Phoenix office and retail project CityScape has received a $12 million loan from a Hispanic organization's community development agency for construction of the Hotel Palomar.

A limited-liability corporation under Chicanos Por La Causa's umbrella, Prestamos CDFI, awarded the loan recently to CityScape's developer, RED Development.

RED agreed to pay a $1 million exit fee as part of the seven-year loan, said Rodie Hernandez, director of Prestamos.

That exit fee "would be utilized and put back in CPLC's services," Hernandez said.

CPLC focuses its community development efforts on assisting low-income and minority residents, businesses and communities, and Hernandez said the hotel project is no exception.

"Our community is a Latino community and a minority community in general. And those permanent jobs (at the hotel) are going to be filled by those individuals," she said.

RED applied and completed a screening process with Prestamos officials in order to get the loan, Hernandez said.

The latest loan is the second this year that RED has received from a Phoenix community development organization for construction of the about $90 million, 242-room boutique hotel near First Street and Washington Street.

It is yet another example of the extensive financial support that community and city officials have provided the downtown hotel, office and retail project since it was proposed in 2006.

Earlier this year, RED received a $34.3 million loan for the hotel from the Phoenix Community Development and Investment Corp., a non-profit group overseen by the city. The remaining $45 million cost of the project has been covered by a loan by Principal Life Insurance Co.

RED officials said that in the sluggish economy, money for big construction projects has been hard to obtain.

Before the recession hit, borrowers could get a loan with a loan-to-cost ratio of 80 percent, enabling them to borrow more money to pay for the bulk of the project while leveraging their equity for the remaining 20 percent.

Jeff Moloznik, RED's development manager, said the typical ratio has fallen to a 50 percent loan-to-cost ratio, which many investors find unappealing. This means the remaining 50 percent would be covered by an investor deemed, in loan terms, "subordinate."

If the project fell apart, and the full loan wasn't repaid, the subordinate might never recover the investment.

In these tight-fisted times, RED has sought help from agencies that handle federal dollars for community development.

The PCDIC and Prestamos loans for the hotel are a unique method of economic development financing, the new markets tax credit program.

The U.S. Department of the Treasury oversees this financing, which Congress established in 2000 as an economic driver in low-income communities. The program reduces a company's project costs by cutting its federal income tax.

To qualify for the tax credit, the company's project must be in an area deemed low-income and in need of development. Under federal standards, downtown Phoenix is both.

The investor or developer is granted a seven-year tax credit against its federal income tax return. In exchange, the developer invests equity in the community development organization. The tax credit is worth 39 percent of the company's equity investment, according to Treasury rules.

The PCDIC and Prestamos are among a dozen organizations in Arizona federally certified to dole out the tax credits.

Since the program began, the Department of Treasury has awarded $29.5 billion in tax credits to 594 projects. Whether the new market tax credits measurably improve the economy in low-income areas remains to be seen; no federal agency tracks the success of the program, according to the Government Accountability Office, Congress' investigative arm.

MORE ON THIS TOPIC

Downtown Phoenix's CityScape

A portion of the constructions costs for the $600-million CityScape project by RED Development has been eased by investment from community development groups and the city of Phoenix, which owns the two-block property. The groups and the city supported CityScape's development through various forms of investment:

- Phoenix has given RED $57 million in incentives, primarily by paying for construction of the garage beneath CityScape. The city also has, through an economic growth mechanism available through Arizona law, abated all property taxes for CityScape for eight years.

- An estimated $82 million in loans for the hotel, retail and office project were given by Phoenix Community Development and Investment Corp., a community development non-profit group overseen by the city.

- This summer, the Chicanos Por La Causa community development organization, Prestamos, agreed to loan $12 million for the hotel project.

Source: Interviews and Phoenix public records

by Emily Gersema The Arizona Republic Jul. 21, 2011 12:00 AM




Hispanic organization loan brings CityScape hotel

Hispanic organization loan brings CityScape hotel

The developer of the downtown Phoenix office and retail project CityScape has received a $12 million loan from a Hispanic organization's community development agency for construction of the Hotel Palomar.

A limited-liability corporation under Chicanos Por La Causa's umbrella, Prestamos CDFI, awarded the loan recently to CityScape's developer, RED Development.

RED agreed to pay a $1 million exit fee as part of the seven-year loan, said Rodie Hernandez, director of Prestamos.

That exit fee "would be utilized and put back in CPLC's services," Hernandez said.

CPLC focuses its community development efforts on assisting low-income and minority residents, businesses and communities, and Hernandez said the hotel project is no exception.

"Our community is a Latino community and a minority community in general. And those permanent jobs (at the hotel) are going to be filled by those individuals," she said.

RED applied and completed a screening process with Prestamos officials in order to get the loan, Hernandez said.

The latest loan is the second this year that RED has received from a Phoenix community development organization for construction of the about $90 million, 242-room boutique hotel near First Street and Washington Street.

It is yet another example of the extensive financial support that community and city officials have provided the downtown hotel, office and retail project since it was proposed in 2006.

Earlier this year, RED received a $34.3 million loan for the hotel from the Phoenix Community Development and Investment Corp., a non-profit group overseen by the city. The remaining $45 million cost of the project has been covered by a loan by Principal Life Insurance Co.

RED officials said that in the sluggish economy, money for big construction projects has been hard to obtain.

Before the recession hit, borrowers could get a loan with a loan-to-cost ratio of 80 percent, enabling them to borrow more money to pay for the bulk of the project while leveraging their equity for the remaining 20 percent.

Jeff Moloznik, RED's development manager, said the typical ratio has fallen to a 50 percent loan-to-cost ratio, which many investors find unappealing. This means the remaining 50 percent would be covered by an investor deemed, in loan terms, "subordinate."

If the project fell apart, and the full loan wasn't repaid, the subordinate might never recover the investment.

In these tight-fisted times, RED has sought help from agencies that handle federal dollars for community development.

The PCDIC and Prestamos loans for the hotel are a unique method of economic development financing, the new markets tax credit program.

The U.S. Department of the Treasury oversees this financing, which Congress established in 2000 as an economic driver in low-income communities. The program reduces a company's project costs by cutting its federal income tax.

To qualify for the tax credit, the company's project must be in an area deemed low-income and in need of development. Under federal standards, downtown Phoenix is both.

The investor or developer is granted a seven-year tax credit against its federal income tax return. In exchange, the developer invests equity in the community development organization. The tax credit is worth 39 percent of the company's equity investment, according to Treasury rules.

The PCDIC and Prestamos are among a dozen organizations in Arizona federally certified to dole out the tax credits.

Since the program began, the Department of Treasury has awarded $29.5 billion in tax credits to 594 projects. Whether the new market tax credits measurably improve the economy in low-income areas remains to be seen; no federal agency tracks the success of the program, according to the Government Accountability Office, Congress' investigative arm.

MORE ON THIS TOPIC

Downtown Phoenix's CityScape

A portion of the constructions costs for the $600-million CityScape project by RED Development has been eased by investment from community development groups and the city of Phoenix, which owns the two-block property. The groups and the city supported CityScape's development through various forms of investment:

- Phoenix has given RED $57 million in incentives, primarily by paying for construction of the garage beneath CityScape. The city also has, through an economic growth mechanism available through Arizona law, abated all property taxes for CityScape for eight years.

- An estimated $82 million in loans for the hotel, retail and office project were given by Phoenix Community Development and Investment Corp., a community development non-profit group overseen by the city.

- This summer, the Chicanos Por La Causa community development organization, Prestamos, agreed to loan $12 million for the hotel project.

Source: Interviews and Phoenix public records

by Emily Gersema The Arizona Republic Jul. 21, 2011 12:00 AM




Hispanic organization loan brings CityScape hotel

Hispanic organization loan brings CityScape hotel

The developer of the downtown Phoenix office and retail project CityScape has received a $12 million loan from a Hispanic organization's community development agency for construction of the Hotel Palomar.

A limited-liability corporation under Chicanos Por La Causa's umbrella, Prestamos CDFI, awarded the loan recently to CityScape's developer, RED Development.

RED agreed to pay a $1 million exit fee as part of the seven-year loan, said Rodie Hernandez, director of Prestamos.

That exit fee "would be utilized and put back in CPLC's services," Hernandez said.

CPLC focuses its community development efforts on assisting low-income and minority residents, businesses and communities, and Hernandez said the hotel project is no exception.

"Our community is a Latino community and a minority community in general. And those permanent jobs (at the hotel) are going to be filled by those individuals," she said.

RED applied and completed a screening process with Prestamos officials in order to get the loan, Hernandez said.

The latest loan is the second this year that RED has received from a Phoenix community development organization for construction of the about $90 million, 242-room boutique hotel near First Street and Washington Street.

It is yet another example of the extensive financial support that community and city officials have provided the downtown hotel, office and retail project since it was proposed in 2006.

Earlier this year, RED received a $34.3 million loan for the hotel from the Phoenix Community Development and Investment Corp., a non-profit group overseen by the city. The remaining $45 million cost of the project has been covered by a loan by Principal Life Insurance Co.

RED officials said that in the sluggish economy, money for big construction projects has been hard to obtain.

Before the recession hit, borrowers could get a loan with a loan-to-cost ratio of 80 percent, enabling them to borrow more money to pay for the bulk of the project while leveraging their equity for the remaining 20 percent.

Jeff Moloznik, RED's development manager, said the typical ratio has fallen to a 50 percent loan-to-cost ratio, which many investors find unappealing. This means the remaining 50 percent would be covered by an investor deemed, in loan terms, "subordinate."

If the project fell apart, and the full loan wasn't repaid, the subordinate might never recover the investment.

In these tight-fisted times, RED has sought help from agencies that handle federal dollars for community development.

The PCDIC and Prestamos loans for the hotel are a unique method of economic development financing, the new markets tax credit program.

The U.S. Department of the Treasury oversees this financing, which Congress established in 2000 as an economic driver in low-income communities. The program reduces a company's project costs by cutting its federal income tax.

To qualify for the tax credit, the company's project must be in an area deemed low-income and in need of development. Under federal standards, downtown Phoenix is both.

The investor or developer is granted a seven-year tax credit against its federal income tax return. In exchange, the developer invests equity in the community development organization. The tax credit is worth 39 percent of the company's equity investment, according to Treasury rules.

The PCDIC and Prestamos are among a dozen organizations in Arizona federally certified to dole out the tax credits.

Since the program began, the Department of Treasury has awarded $29.5 billion in tax credits to 594 projects. Whether the new market tax credits measurably improve the economy in low-income areas remains to be seen; no federal agency tracks the success of the program, according to the Government Accountability Office, Congress' investigative arm.

MORE ON THIS TOPIC

Downtown Phoenix's CityScape

A portion of the constructions costs for the $600-million CityScape project by RED Development has been eased by investment from community development groups and the city of Phoenix, which owns the two-block property. The groups and the city supported CityScape's development through various forms of investment:

- Phoenix has given RED $57 million in incentives, primarily by paying for construction of the garage beneath CityScape. The city also has, through an economic growth mechanism available through Arizona law, abated all property taxes for CityScape for eight years.

- An estimated $82 million in loans for the hotel, retail and office project were given by Phoenix Community Development and Investment Corp., a community development non-profit group overseen by the city.

- This summer, the Chicanos Por La Causa community development organization, Prestamos, agreed to loan $12 million for the hotel project.

Source: Interviews and Phoenix public records

by Emily Gersema The Arizona Republic Jul. 21, 2011 12:00 AM




Hispanic organization loan brings CityScape hotel

Hispanic organization loan brings CityScape hotel

The developer of the downtown Phoenix office and retail project CityScape has received a $12 million loan from a Hispanic organization's community development agency for construction of the Hotel Palomar.

A limited-liability corporation under Chicanos Por La Causa's umbrella, Prestamos CDFI, awarded the loan recently to CityScape's developer, RED Development.

RED agreed to pay a $1 million exit fee as part of the seven-year loan, said Rodie Hernandez, director of Prestamos.

That exit fee "would be utilized and put back in CPLC's services," Hernandez said.

CPLC focuses its community development efforts on assisting low-income and minority residents, businesses and communities, and Hernandez said the hotel project is no exception.

"Our community is a Latino community and a minority community in general. And those permanent jobs (at the hotel) are going to be filled by those individuals," she said.

RED applied and completed a screening process with Prestamos officials in order to get the loan, Hernandez said.

The latest loan is the second this year that RED has received from a Phoenix community development organization for construction of the about $90 million, 242-room boutique hotel near First Street and Washington Street.

It is yet another example of the extensive financial support that community and city officials have provided the downtown hotel, office and retail project since it was proposed in 2006.

Earlier this year, RED received a $34.3 million loan for the hotel from the Phoenix Community Development and Investment Corp., a non-profit group overseen by the city. The remaining $45 million cost of the project has been covered by a loan by Principal Life Insurance Co.

RED officials said that in the sluggish economy, money for big construction projects has been hard to obtain.

Before the recession hit, borrowers could get a loan with a loan-to-cost ratio of 80 percent, enabling them to borrow more money to pay for the bulk of the project while leveraging their equity for the remaining 20 percent.

Jeff Moloznik, RED's development manager, said the typical ratio has fallen to a 50 percent loan-to-cost ratio, which many investors find unappealing. This means the remaining 50 percent would be covered by an investor deemed, in loan terms, "subordinate."

If the project fell apart, and the full loan wasn't repaid, the subordinate might never recover the investment.

In these tight-fisted times, RED has sought help from agencies that handle federal dollars for community development.

The PCDIC and Prestamos loans for the hotel are a unique method of economic development financing, the new markets tax credit program.

The U.S. Department of the Treasury oversees this financing, which Congress established in 2000 as an economic driver in low-income communities. The program reduces a company's project costs by cutting its federal income tax.

To qualify for the tax credit, the company's project must be in an area deemed low-income and in need of development. Under federal standards, downtown Phoenix is both.

The investor or developer is granted a seven-year tax credit against its federal income tax return. In exchange, the developer invests equity in the community development organization. The tax credit is worth 39 percent of the company's equity investment, according to Treasury rules.

The PCDIC and Prestamos are among a dozen organizations in Arizona federally certified to dole out the tax credits.

Since the program began, the Department of Treasury has awarded $29.5 billion in tax credits to 594 projects. Whether the new market tax credits measurably improve the economy in low-income areas remains to be seen; no federal agency tracks the success of the program, according to the Government Accountability Office, Congress' investigative arm.

MORE ON THIS TOPIC

Downtown Phoenix's CityScape

A portion of the constructions costs for the $600-million CityScape project by RED Development has been eased by investment from community development groups and the city of Phoenix, which owns the two-block property. The groups and the city supported CityScape's development through various forms of investment:

- Phoenix has given RED $57 million in incentives, primarily by paying for construction of the garage beneath CityScape. The city also has, through an economic growth mechanism available through Arizona law, abated all property taxes for CityScape for eight years.

- An estimated $82 million in loans for the hotel, retail and office project were given by Phoenix Community Development and Investment Corp., a community development non-profit group overseen by the city.

- This summer, the Chicanos Por La Causa community development organization, Prestamos, agreed to loan $12 million for the hotel project.

Source: Interviews and Phoenix public records

by Emily Gersema The Arizona Republic Jul. 21, 2011 12:00 AM




Hispanic organization loan brings CityScape hotel

Hispanic organization loan brings CityScape hotel

The developer of the downtown Phoenix office and retail project CityScape has received a $12 million loan from a Hispanic organization's community development agency for construction of the Hotel Palomar.

A limited-liability corporation under Chicanos Por La Causa's umbrella, Prestamos CDFI, awarded the loan recently to CityScape's developer, RED Development.

RED agreed to pay a $1 million exit fee as part of the seven-year loan, said Rodie Hernandez, director of Prestamos.

That exit fee "would be utilized and put back in CPLC's services," Hernandez said.

CPLC focuses its community development efforts on assisting low-income and minority residents, businesses and communities, and Hernandez said the hotel project is no exception.

"Our community is a Latino community and a minority community in general. And those permanent jobs (at the hotel) are going to be filled by those individuals," she said.

RED applied and completed a screening process with Prestamos officials in order to get the loan, Hernandez said.

The latest loan is the second this year that RED has received from a Phoenix community development organization for construction of the about $90 million, 242-room boutique hotel near First Street and Washington Street.

It is yet another example of the extensive financial support that community and city officials have provided the downtown hotel, office and retail project since it was proposed in 2006.

Earlier this year, RED received a $34.3 million loan for the hotel from the Phoenix Community Development and Investment Corp., a non-profit group overseen by the city. The remaining $45 million cost of the project has been covered by a loan by Principal Life Insurance Co.

RED officials said that in the sluggish economy, money for big construction projects has been hard to obtain.

Before the recession hit, borrowers could get a loan with a loan-to-cost ratio of 80 percent, enabling them to borrow more money to pay for the bulk of the project while leveraging their equity for the remaining 20 percent.

Jeff Moloznik, RED's development manager, said the typical ratio has fallen to a 50 percent loan-to-cost ratio, which many investors find unappealing. This means the remaining 50 percent would be covered by an investor deemed, in loan terms, "subordinate."

If the project fell apart, and the full loan wasn't repaid, the subordinate might never recover the investment.

In these tight-fisted times, RED has sought help from agencies that handle federal dollars for community development.

The PCDIC and Prestamos loans for the hotel are a unique method of economic development financing, the new markets tax credit program.

The U.S. Department of the Treasury oversees this financing, which Congress established in 2000 as an economic driver in low-income communities. The program reduces a company's project costs by cutting its federal income tax.

To qualify for the tax credit, the company's project must be in an area deemed low-income and in need of development. Under federal standards, downtown Phoenix is both.

The investor or developer is granted a seven-year tax credit against its federal income tax return. In exchange, the developer invests equity in the community development organization. The tax credit is worth 39 percent of the company's equity investment, according to Treasury rules.

The PCDIC and Prestamos are among a dozen organizations in Arizona federally certified to dole out the tax credits.

Since the program began, the Department of Treasury has awarded $29.5 billion in tax credits to 594 projects. Whether the new market tax credits measurably improve the economy in low-income areas remains to be seen; no federal agency tracks the success of the program, according to the Government Accountability Office, Congress' investigative arm.

MORE ON THIS TOPIC

Downtown Phoenix's CityScape

A portion of the constructions costs for the $600-million CityScape project by RED Development has been eased by investment from community development groups and the city of Phoenix, which owns the two-block property. The groups and the city supported CityScape's development through various forms of investment:

- Phoenix has given RED $57 million in incentives, primarily by paying for construction of the garage beneath CityScape. The city also has, through an economic growth mechanism available through Arizona law, abated all property taxes for CityScape for eight years.

- An estimated $82 million in loans for the hotel, retail and office project were given by Phoenix Community Development and Investment Corp., a community development non-profit group overseen by the city.

- This summer, the Chicanos Por La Causa community development organization, Prestamos, agreed to loan $12 million for the hotel project.

Source: Interviews and Phoenix public records

by Emily Gersema The Arizona Republic Jul. 21, 2011 12:00 AM




Hispanic organization loan brings CityScape hotel