The $80 Million Harlem Hotel Project – What’s the Hold Up?
On 100 West 125th Street sits a 32,500 square foot parcel of land, just before the street intersects with Lenox Avenue. The grass is unkempt and the back walls are tagged with graffiti.
On the fence around the lot, faded signs warn of rat poison. But coming soon: an $80 million hotel and retail complex.
Despite recent reports that the project was in limbo, it got full approval from the New York City Capital Resource Corporation in a board of directors meeting today.
“We are very appreciative of the board’s approval,” said Brian Morris, president of Esmith Legacy Inc., a commercial real estate development and investment management company.
In June, the corporation awarded the Esmith group, headed by Hall of Fame running back Emmitt Smith, close to 20 million dollars, untaxed, in Recovery Zone Facility Bonds to build the project.
The Recovery Zone Bond program, created by Congress as part of the stimulus package, helps jump-start economic activity in neighborhoods hit hard by the recession.
Esmith’s application for the bonds stated that groundbreaking would take place in October. During the meeting, however, Maureen Babis, a New York City Economic Development Corporation official, stated that construction would begin early next year.
The developer has reached an agreement with the New York Hotel and Motel Trades Council, Babis reported, and is in final negotiations with the construction company, MWB General Construction.
A Capital Resource Corporation cost/benefit analysis states that Esmith’s project will cost close to $81 million. The hotel development costs alone will reach almost $56 million, the document states, including approximately $10 million for land acquisition, $26 million in construction costs, $53.3 million in furnishing and opening costs, and $16.3 million “in fees, soft costs and reserves”. The development’s retail and community uses will cost about $25 million and will be financed privately, according to the document.
Esmith Legacy’s application describes a 100,000 square foot hotel, plus 70,000 square feet of retail space, creating 129 construction and 81 permanent jobs.
“Approval of the bonds is the first step, but they have not been able to close the bonds they were awarded to finalize the deal,” Julie Wood, spokesperson for the New York City Economic Development Corporation, the city’s prime agency for promoting economic growth, said in an interview. “We are in contact with Esmith Legacy and hope they will be able to close the deal soon.”
The deadline to close is December 31. If Emmitt Smith’s group cannot close, then the money goes back to Washington, because the Recovery Zone Bonds will have expired.
“New York City was allocated with close to $121 million in Recovery Zone Bonds. *Roughly one hundred million has already been approved,” said Wood. This figure includes the $19.7 million for Esmith.
*The story originally misquoted Julie Wood saying $100 million has already been spent, and the remaining money was earmarked for Esmith. The $100 million has been approved, not spent, and it includes the money for Esmith.
http://theuptowner.org/2010/11/09/80-million-harlem-hotel-project-moves-closer-to-construction/