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DoubleTree construction starts in June; developer says financing not a concern

Monday, May 7, 2012 | 9:39 a.m. CDT; updated 5:55 p.m. CDT, Tuesday, May 8, 2012
Workers use an excavator jackhammer to demolish parts of the Regency Hotel in this April 23 file photo. Construction of the DoubleTree hotel that is planned for the site will begin in June.

COLUMBIA — As demolition of the Regency Hotel downtown comes to a close and construction of the DoubleTree hotel that will take its place nears, developer Dave Parmley says he will have financing for the project in place within the month.

With enough equity in hand to cover the cost of the land and the demolition of Regency Hotel, Parmley still needs $15 million to cover the cost of his project. Parmley said three banks have committed to provide loans to fund the construction, which will begin in June. 

The DoubleTree is part of a trio of major downtown developments on the 1.2 acres of property along Short Street immediately north of Broadway. The city will build a 423-space parking garage on the site, while North Light, LLC, will erect a building with retail, office and residential space.

Deputy City Manager Tony St. Romaine said the city and the developers will meet frequently to ensure the simultaneous projects go smoothly. 

"We need to make sure we are all aware of each other's schedules so that we do not get in each other's way," St. Romaine said.

The projects are interconnected through a series of land deals and contracts. The city paid Parmley $1.25 million for the garage property last year, and it later sold part of that land to North Light for $150,000. 

Agreements among the city and the developers call for all the projects to be complete sometime during the summer of 2013.

St. Romaine predicted the projects will act as an economic catalyst in the area, bringing new jobs and tax revenue and having a positive impact on surrounding businesses.

City officials will meet with Parmley over the next few weeks to review his financing. St. Romaine said Parmley's track record with previous hotel developments in St. Louis and Columbia give him confidence.

"I feel 100 percent sure he will build a quality development in the time frame," St. Romaine said.

The DoubleTree hotel carries a $20 million price tag. A tax-increment financing agreement with the city will bring the real cost down to about $17 million.

Parmley also has two short-term loans totaling $4.5 million from a venture capital company called Advantage Capital, according to documents obtained from the Boone County Recorder of Deeds

Advantage Capital Partners was founded in New Orleans and has offices in St. Louis and other cities.

The company said in an email to the Missourian that the short-term financing was intended to cover the purchase of the property and demolition of the Regency Hotel.

"As architectural plans are finalized and terms and conditions are negotiated, it is our intent to extend the term of loan and provide additional investment dollars," wrote Deborah Dubin of Advantage Capital Partners.

Advantage Capital also loaned Parmley $14 million for the Hampton Inn & Suites that Parmley built on Stadium Boulevard. That financing, as well as the $4.5 million it has loaned Parmley for the DoubleTree project, came through the New Markets Tax Credit Program, a federal and state effort that provides income tax credits to encourage investment in low-income and distressed communities. Both the Hampton Inn and DoubleTree hotel projects are within the program's qualified area. 

Parmley said he has commitment letters from three banks outside Columbia for the DoubleTree, but he declined to identify them, citing confidentiality agreements. He said lawyers were working on the final agreements, and his team will close on the deals within a month.

Parmley's team also presented an architectural design to Hilton Worldwide last week.

"Their design team was very impressed with our concept and vision for the project," Parmley said in an email, adding that a few minor revisions are in the works. He said the company will release details at a news conference within 30 days.

Construction of the North Light building will have to wait until most floors of the garage are built, St. Romaine said.

Robert Grove, who is teaming up with architect Nick Peckham to develop the North Light building, said Grove Construction will serve as the general contractor. He expects that project will take about 14 months. 

Garage already oversold

St. Romaine said the city's Purchasing Department is preparing bid documents for the garage, and he expects construction to begin in July. He said he is confident that demand for spaces in the garage will be high, despite a decision by Jonathan and Nathan Odle to build a private parking garage in conjunction with their apartment developments at College Avenue and Walnut Street.

"My understanding from the Odles is they still want to rent spaces in the Short Street garage," St. Romaine said, adding that the city will have no problem selling spaces even if the Odles withdraw their request.

Parmley has a contract with the city to lease 28 designated spaces in the garage for $100 a month and 73 non-designated spaces for $60 a month for at least the next 20 years.

North Light also has a contract to lease 15 designated spaces and is considering whether to lease another 85 spaces. Whether it will follow through on the additional spaces is unclear, though, because Boone County Family Resources has announced that a potential deal to lease office space from North Light has fallen through.*

Boone County Family Resources said in a news release that North Light's asking price of $200 per square foot is too expensive.

"We are responsible to taxpayers and believe this purchase would not be a prudent use of tax funds," Executive Director Les Wagner said in the news release. It was unclear whether the agency is still interested in leasing spaces in the parking garage.

St. Romaine said there is huge demand for downtown parking and noted that all the permit spaces in the garage at Fifth and Walnut streets have sold out. He said the Short Street garage is intended to accommodate more than the DoubleTree hotel.

"There was already a need of parking for North Village Arts District," he said.

Former Regency Hotel owner confident in Parmley

Parmley is not alone in his pursuit of a downtown boutique hotel. The former Regency Hotel owner, Michael Ebert, approached the city five years ago with a similar plan to tear down that structure and build a boutique hotel.

Ebert's plan also asked the city to buy two surface parking lots to help him finance the project. He and the city had discussed creating a transportation development district to defray part of the city's cost for building the garage. The economic downturn made it difficult for him to fully finance his project, so he sold the property to Parmley in 2011.

Ebert said the deal with Dave Parmley is in the best interest of the city.

"Columbia could not have picked a better partner and a better team of people to build the DoubleTree hotel."

 Supervising editor is Scott Swafford.


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Comments

William Moore May 7, 2012 | 11:50 a.m.

Seriously, is is too much to ask to get a rendering of this hotel to accompany the story?!?!? According to the story about this project prior to this, a rendering exists as the developer was showing it to people. A rendering of the completed high-rise hotel says a lot more than a demolition fie photo from April 23.

(Report Comment)
Yue Xi May 7, 2012 | 2:15 p.m.

Hi Mr Moore,

I'm the writer of this story.I asked the developer about the rendering both last time and this time when I wrote the story. However Mr Parmley, the developer, said he would prefer holding a news conference and to release details of his project by then. Please let me know if you have more questions.

Yue Xi
Reporter,
Columbia Missourian

(Report Comment)
Richard Saunders May 7, 2012 | 3:35 p.m.

You'll get your hotel rendering just as soon as these welfare queens get the free money to create it.

It's a sad damn day when theft is justified in order to build a hotel and parking garage. I wonder, just how ever did people survive back when they had to bear the risk for their own entrepreneurial activities?

These days, if you cannot pass of the risk onto the general public, you can't get it funded. Economic planning has been fully replaced by political greasing.

I'd bring up the subject of "moral hazard" but since these are public servants we're talking about, it would be completely over their heads.

Nope, all they know is how to help their buddies plunder the populace under the guise of "serving" them.

(Report Comment)
Mike Martin May 7, 2012 | 3:58 p.m.

Richard may sound harsh here, but his concerns are justified, if this story is to be believed:

http://www.bloomberg.com/news/2011-02-08...

Notice what that story says about how student populations drive up the Census figures on poverty, and how those figures are manipulated to qualify for these tax incentive programs (which also include EEZ and TIF).

Not only is Parmley getting the local TIF, but also the New Market Tax Credits. One wonders just how viable this project will ultimately prove, given all that it appears to have been built almost 100% on taxpayer subsidies.

That Parmley is keeping so much secret seems esp. wrong, in light of all the subsidies.

(Report Comment)
William Moore May 7, 2012 | 7:32 p.m.

Xue Xi: Thank you for responding. What about requesting it from the City's planning department? Given that it's gone this far and they say construction will begin in June, I would be shocked if they don;t have it. Plus, I assume it would be a matter of public record and they are required to share it. Frankly, it just makes sense for Mr Parmley to reveal it sooner than later. I think the city needs more downtown hotel rooms, and also needs to build more high-rise structures on in-fill lots downtown vs. spending a fortune extending the city infrastructure outward (R. Saunders, why don;t you look into the costs to expend city services, roads, bus lines, etc. to the hinterlands of Boone County vs. what incentives are being doled out to spark greater density and development downtown Both the short- and long-terms costs of sprawl are much greater for all Columbians (except, of course for the developers and builders of all the cheap, squat strip malls and other non-desrcript low-rise buildings around Nifong and Providence, for example).

(Report Comment)
Derrick Fogle May 8, 2012 | 6:30 p.m.

The building is gone, but the sign is still standing. Cracks me up every time I see it. I love this town's occasional quirks!

(Report Comment)

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