Construction of the Hyatt Place in downtown Riverside won't start until June according to developer Siavash Barmand with MetroPacific Properties, the same firm revitalizing the downtown Fox Theater.
While the city and the developer expected a groundbreaking this month after the project was delayed since last summer (click on the link below to read more), Siavash said Friday that the project's environmental impact review still needs to be finished.
I had spoken to a few hotel industry experts for this story regarding the state of hospitality in this wild economy of ours.
Most felt the same way -- that if a hotel developer hadn't started contructing a hotel yet, it wouldn't necessarily be hard to finish but it would certainly be unlikely. Part of the challenge is initial construction loan financing. At least one hotel broker noticed that projects trying to pay off their contruction loans with permanent financing are having difficulty getting lenders to loosen enough cash to cover their debt. Others said hotel developers with well-established relationships with lenders who can prove their project is viable shouldn't have too much trouble getting financing.
Siavash said he already has about 95 percent of his funding in place, and rather then get a construction loan first that has to be paid off later, "we're locking in our permanent financing up front."
Headline: Fox Plaza delayed on hotel // DOWNTOWN: Plans for a Hyatt Place are months behind. Other parts of the project are on track,
Date: 09/16/07
Day: Sunday
Credit: THE PRESS -ENTERPRISE
Section: LOCAL
Zone: RIVERSIDE ; MORENO VALLEY
Page: B01
Byline: DOUG HABERMAN
RIVERSIDE -- Construction on a hotel touted as one of the keys to revitalizing Riverside 's downtown is months behind schedule, a development firm executive and city officials said last week. Work was supposed to begin this summer on the 125-room hotel, set to go on Market Street at Fifth Street, just south of the Riverside Marriott. Now, officials are saying it won't break ground until March.
"We were hoping it would be this summer," said city Development Director Belinda Graham. MetroPacific Properties is developing Fox Plaza. Top executive Siavash Barmand said the delay in building the hotel is because MetroPacific took its time to cut a deal with a hotel chain.
"We wanted to make sure we got the right brand," he said. He is still under a confidentiality agreement with the chain, Barmand said, but Graham and Councilman Dom Betro said it's their
understanding the hotel will be a Hyatt Place . It should take 14 months to build, Barmand said.
Hyatt Place is a new line of contemporary-style hotels, but the exterior of Riverside 's hotel will feature a Mediterranean/mission revival style to match the rest of the Fox Plaza project, Graham said. MetroPacific, a Bay Area firm, is buying the hotel as a franchise, which also delayed construction. The first phase of Fox Plaza is expected to occupy the eastern side of Market Street between Fifth Street and Mission Inn Avenue.
The multistory project would mix upper-floor condominiums and live/work lofts with ground-level restaurants and stores. The condominium and retail portion of the project are on track,
officials said. Fox Plaza is meant to attract "empty nesters" - suburban couples whose children have left home and who are looking for a smaller, more urban home close to entertainment and dining - as well as young professionals, Barmand said. City officials, including Riverside Mayor Ron Loveridge, have repeatedly stressed the importance of projects like Fox Plaza. They
are meant to boost the number of downtown residents with disposable income in order to attract more upscale restaurants and stores.
In addition to the hotel, the block between Fifth and Sixth streets would include 40 condominiums wrapped around a parking garage. The condos should be ready for move-in by mid-2009, Barmand said.
Originally, there were only going to be 23 condominiums on this block. The redesign adds one floor and a mezzanine, Barmand said.
The block between Sixth Street and Mission Inn Avenue would have 160 living units - condominiums and live/work lofts - and two levels of underground parking as well as street-level space for stores and restaurants. The living units would range from 750 square feet to 1,200 square feet, Barmand said.
This portion of the project's first phase should be done by Christmas 2009, he said. The timing might be favorable to MetroPacific since projections show the flagging Inland real estate market isn't likely to rebound until the last quarter of 2009, Riverside -based real estate broker
Scott Chappell said.
The second phase of Fox Plaza would occupy the square block that contains the Fox Theater and would include almost 200 more residential units.
Barmand said he was unsuccessful in acquiring property for this later phase and would need the city Redevelopment Agency's help, which might require the use of eminent domain.
Chani Beeman, chairwoman of the Downtown Area Neighborhood Alliance, said most downtown residents see the Fox Theater renovation as paramount to the neighborhood's revitalization while Fox Plaza and other residential or mixed-use projects are secondary, although people understand they would add vibrancy to downtown, she said. If it took too long to build Fox Plaza, "it does risk discouraging people," Beeman said, because the track record on similar downtown revitalization projects hasn't been so good.
Villaggio, a proposed redevelopment project that would have gone where Fox Plaza would now go, fell through in 2004 when high construction costs prevented it from making economic sense.
Reach Doug Haberman at 951-368-9644 or dhaberman@PE.com
Posted by Kimberly Pierceall at 1:43 PM, March 21
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