Funding partner back out, new one steps in
Published 12:00 am Saturday, August 2, 2003
Stormont Hospitality Group is moving ahead with plans to build the $22 million Hilton Garden Inn and Conference City – without its original funding partner, the Procaccianti Group.
Stormont Hospitality announced late Friday that it has brought in the Atlanta-based Noble Investment Group to be its equity partner and operator of the 150-room hotel on Constant’s Wharf. The announcement ends weeks of rumors that Procaccianti has wanted out of the project.
Email newsletter signup
Noble will adhere to the same deal that had been negotiated with Procaccianti, said James M. Stormont Jr., president of Stormont Hospitality Group.
The plans calls for a public investment of $13 million, which would be generated by the Industrial Development Authority’s sale of industrial revenue bonds. Nearly all that money is earmarked for the city-owned convention center.
Noble and Stormont, operating as Suffolk Hotels LLC, will invest $9.5 million in the project. The group will put up $3.5 million in cash and fund the remainder with a $6 million loan from TowneBank, which is being secured by a $2 million letter of credit from the City of Suffolk.
Documents are being reviewed and signed by respective companies and a closing is anticipated within the next 30-60 days, Stormont said. Construction will be ready to begin shortly thereafter, said City Manager R. Steven Herbert.
Neither the city nor Stormont would elaborate on why the Procaccianti Group is no longer involved on the project. Stormont’s press release indicated that change was made due to &uot;complications in the financing structure&uot; it had with Procaccianti.
Efforts to reach Procaccianti officials were unsuccessful Friday.
Mit Shah, president of Noble Investments, said his company is excited and ready to move forward on the project.
&uot;We are committed to this project and we’re ready to go as soon as we close the deal,&uot; Shah said. &uot;Our goal, now that we’ve gotten to this step, is finish getting documentation in order so we can start construction.&uot;
A tentative opening date of January 2005 has been set, he said.
Noble first became involved around July 4, when company representatives visited the city and met with key city officials at Stormont’s request, Shah said.
&uot;We listened and rode around the city and came away with a tremendous sense of confidence in the leadership of the city,&uot; he said. &uot;We got a sense that they are really trying to put the city on the map.
&uot;I think what excites us most about being involved is the local support for project. You don’t always find that in typical development opportunities.&uot;