For the same price, the PDC simulteanously transferred the property to Portland State University for use as student housing and conference space, and more parking. Concurrent with the transfer, Boykin says it sold the furniture, fixtures and equipment of the hotel to PSU for approximately $2.3 million.
The hotel is located on 4.2 acres at Third Avenue and Lincoln Street, adjacent to the university. The PDC and Boykin agreed on the price in December, the same time it came to agreement with PSU. The transactions have been on hold while PSU obtained the necessary financing to complete the deal. PSU's Kathy Dyck tells GlobeSt.com the acquisition was paid for with state revenue bonds that will be paid back with revenues from the property's operation.
According to the disposition and development agreement between the PDC and PSU, in exchange for the property, PSU will make available to the PDC a piece of the underutilized site for up to 150 units of affordable "open market" housing if the PDC can secure financing for such a project within the next 10 years. Other portions of the property will be utilized by PSU to develop more student housing.
Dyck says the hotel will "go dark" for the next two months "until we can get our operational system into place, do a deep cleaning and really take a look at the property to see what can be done." The plan is to hire staff and be ready to reopen the facility on May 1, she says, at which point it will be run as "an educational conference center that also has rooms available."
Cleveland-based Boykin says that, pursuant to the terms of its $130 million term loan, which was secured by the hotel, approximately $16.9 million of the net proceeds from the condemnation were used to reduce the outstanding loan balance, while net proceeds from the sale of the furniture, fixtures and equipment were deposited into the loan reserves. Boykin anticipates that the transactions will result in a gain of approximately $1.5 million, which will be used for general corporate purposes.
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