Hotel Developers Want To Talk Again
But just days before their second luncheon meeting with commissioners, and their first in 11 weeks, they changed their request to a 10-month exclusive option on the building, leaving out the buy-sell portion.
Why? Because they said they didn’t have the numbers ready to ask for a buy-sell.
“We didn’t want to put a number on it because if you put one number up, you have to put them all up, and none of the numbers are relevant now. That’s why we didn’t do it,” said Ed Kettle, public information director for Blue Bridge Ventures.
“That’s why we changed our proposal. And that’s why we thought we had an agreement with city staff to proceed like that.”
Blue Bridge is a local real estate developer that has joined forces with Hines Interests LP of Houston to propose the hotel for the plaza. The two firms have formed Gallium Group LLC for the project that requires the city and county to move from the plaza to make way for a 24-story hotel they want to build there.
At the meeting on Sept. 24, Mayor John Logie told the developers that he knew enough about the hotel business to believe that they could show enough profit to pay for a hotel that is expected to cost them at least $50 million to build.
But Logie added that he didn’t see how they could generate enough revenue from the hotel to pay for relocating the city and the county to separate downtown sites, a move that the mayor estimated would cost the developers between $40 and $50 million.
“We’ve given them the model. We’ve worked over that model intensely to find out if it’s a model that can stand on its own feet. I think we’ve agreed that it is a model that we can use,” said Kettle.
“Now we have to go back and plug the actual numbers into that model. Any numbers that the mayor uses, or anyone else uses, are very interesting, but not the least bit relevant until we get the study done.”
The developers hope to get together with the city again soon to iron out their differences on the option commissioners didn’t vote on two weeks ago.
“There may be some language changes that we can use to give them more of a definition and a little more protection if that is the issue,” said Kettle. “We felt their interpretations were glaringly different than ours.”
But it’s unlikely that the differences will get settled in a single sitting. One reason is the Gallium Group didn’t feel that the nine weeks of talks went deep enough to finalize a deal.
“We’re not there yet, for anybody,” said Kettle “We’ll never be there until we get to the final numbers and we know exactly what numbers we’re plugging in to put these into the formula and see if it shakes out. And if it doesn’t shake out, we’re willing to live with that.”