Hotel Sounds Great But Can It Work

July 19, 2002
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GRAND RAPIDS — Blue Bridge Venture and Hines Interest LP have some hoops to jump through over the next few weeks as they push their proposal to build a 400-room hotel atop the Calder Plaza.

One hoop is that the site currently is occupied by Grand Rapids City Hall and may or may not impinge upon the adjoining Kent County administration building.

Either way, the proposal requires that city hall be razed and that new quarters be found both for the city’s government and the county’s administrative staff.

Another of those hoops will be proving that the development is financially prudent. 

In a letter distributed by the developers to city commissioners July 9, Bank One stated its interest in looking at a financing transaction for the hotel.

Last week, however, a spokeswoman for the bank told the Business Journal that the firm can say little else at the moment.

“There isn’t a whole lot we can say simply because we have to respect our relationship with a private arrangement,” said Ruth Vis, vice president of Michigan Public Affairs for Bank One.

“As you can imagine, there are many contingencies and not just because of the developer and the municipal government, but obviously contingencies that have to be worked through in any kind of a private arrangement.

“Certainly we are in the preliminary stages of this discussion and there is nothing legally binding,” she said.

“We have no stake in this whole arrangement currently.”  

Would the impact of the proposed development on the downtown area enter into the commercial lender’s evaluation?

“I think you have to simply look at these deals and say, ‘Are they prudent?’” Vis responded.

“The community impact may be very wonderful, but if it’s not a prudent deal, then you don’t do it.”

Vis said certain criteria have to be met and certain steps have to be taken with every proposal of this sort.

She said each deal is custom when it comes to real estate development transactions because of other factors involved — such as environmental issues, among other things.

The commercial lending process is unique from one arrangement to the next, she said.

She explained that there are some things that any lender anywhere would look at: an appraisal, a feasibility study, borrower information, a budget, site plans and so forth.

All that is fairly standard, she said.

“But the sequence in which it happens and the deal that you might make is also very customized by the nature of the dynamics,” she added

“You could probably have as many answers as deals in terms of the complexity and the nature of it and the dynamics and all of the rest. But, clearly, any lender is going to look at standard criteria that are important regardless.”

Aside from standard criteria, the project obviously requires the timely establishment of a new site for city government, another for county administrative staff, as well as parking for those respective staffs and the public at whatever those new locations happen to be.

The hotel would be a 24-story structure dominating much of the central business district and overlooking DeVos Place, the Monroe Avenue convention center that would provide one of the major sources of its business. In fact, an enclosed pedestrian walkway could span Monroe to connect the hotel and DeVos Place.

Proposed for the hotel’s ground level would be an arcade and a ballroom. The developers’ expectation is that the Calder Plaza would continue to be a place for the public to gather. A cast-metal bench extending from the new hotel would partially embrace the Calder sculpture.

The facility also would have a junior ballroom, four meeting rooms and a pool with a view of the street.

An unnamed national chain operator is to manage the new hotel.

According to Blue Bridge President Jack Buchanan, the developers have the financing for the development and Bank One is involved locally.

The developers indicate that they seek a binding option on a buy-sell agreement that would benefit both the city and themselves.

Because of the project’s tight time frame, a detailed proposal reportedly will be submitted to the city in about a month.

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