WEST PALM BEACH, FL-The terms of the deal between PalmBeach County and the Related Co.'s andthe Related Group's to build a large conventionhotel here have changed and could affect the financing of theventure.

Changes to the terms of the deal for the 400-room hotel could bevoted on by Palm Beach County Commissioners on June 4. Some of thechanges include Related being responsible for operating the hotelfor seven years, instead of during the life of its lease, accordingto the South Florida Business Journal. Also, Palm Beach Countywould be responsible for $27 million of the $100-million project,instead of $47 million including a $20-million guarantee on thedeveloper's senior debt as was originally proposed.

“The elimination of the county's mortgage guarantee, along withthe requirement for Related to guarantee that the hotel would stayoperational for up to 98 years, created a significant financingchallenge for the developer,” according to the county agenda itemsummary. “To overcome these financial challenges, Related requestedthat the operational guarantee be reduced to a period of sevenyears after execution of the agreements.” See story in theSouth Florida Business Journal.

Continue Reading for Free

Register and gain access to:

  • Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
  • Educational webcasts, white papers, and ebooks from industry thought leaders
  • Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.

John Jordan

John Jordan is a veteran journalist with 36 years of print and digital media experience.