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.