BOWIE, MD–Columbia, Md.-based Hospitality Development Co. tasked Greenwich Group International, a real estate capital advisory firm with offices in Washington, DC, New York, San Francisco and Southern California, to secure capital to fund the development of the 144-room Courtyard by Marriott Hotel it is building at the entrance of the Melford business park here.

It was business as usual until the first trust lender's appraisal came in surprisingly low. The client, it seemed, would have to fund the shortfall from equity. Understandably it didn't want to do that so Greenwich tapped into funds earmarked for job creation that are available from local public sector entities, according to team leader Don Atchison.

“This added a new level of coordination problems, but all the lenders involved believed in the borrower and his project and worked … to close the financing,” he said in a prepared statement.

This is how the capital stack came out in the end.

There was a $12.4 million first trust construction loan with subordinate financing consisting of $5 million from the Small Business Administration and an additional $2.6 million from several state and county economic development funds. The remaining $2 million was a side loan provided by the first trust lender.

“This added a new level of coordination problems, but all the lenders involved believed in the borrower and his project and worked … to close the financing,” he said in a prepared statement.

This is how the capital stack came out in the end.

Instant Insights /

Local Public Funds Come to the Rescue After A Low Project Appraisal

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