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The Lafayette (Site 4)


avery

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Reynolds didn't dig a hole, they exposed the hole (basement) that was already there.

That being said, the complete lack of work done at site 4 is not good. The city wants more hotel rooms close to the new convention center (especially for the bigger conventions booked in 2010) and Raleigh Memorial Auditorium ASAP. Empire has finished some projects (Hargett/Wilmington) and started others (the L) in the last year or so. It is hard to tell if the issue is financing or not enough staff.

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I think it is telling that both Lafayette and Reynolds have the same building components....hotel and residential. Powerhouse Plaza seems to be moving faster with office and hotel. So to me it seems 1) banks want more than 50% of the building space locked down and 2) it is taking your hotel commitment and another commitment to make that happen, such as the Cline component at Powerhouse Plaza. Condos are just not selling out in downtown Raleigh, 222, West, Quorum, Bloomsbury all have units and Hue has commitments on 13 so far...so its a gradual thing not a crush like it was at first especially with the mega-highend stuff that Lafayette and Reynolds would be peddling.

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^ I wonder if he could do what the Tucker developers did and change the condo element to apartments. I'm sure Empire could handle it as property managers (or find someone else who can), then all they'd need to do is get that hotel operator and that should be enough to get the financing, right?

One would hope at least.

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Here's the N&O's take.

Pretty interesting how the mayor did a 180 on this. He originally supported Allen's plans for new RFP on site 4, saying the RFP "recommendation makes sense" and now votes for the extension (it was unanimous).

"To give a guy like Greg, who has done a lot for the city, a little extra time seems appropriate," Koopman said before today's meeting.

Anyway, I think it does make sense. Hatem has done so much for the city and we'd end up losing more time through an RFP process anyway. He has until November 1st to submit new plans and secure financing, likely with a new building scheme... can you say fewer--or NO--condos?

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I would like to seem them reduce the number of condos and add hotel rooms, convert them to apartments or a combination of the two. Hotels and apartments are what is hot right for DTR, so I would imagine they would be an easier sell to banks for financing.

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The N&O reported that Empire will change the building scheme and resubmit plans within 60 days. He also is negotiating with Klimpton Hotels, out of San Francisco, to manage the property rather than do it independently... probably a smart move.

Greg Hatem said in the News 14 interview that he will scale down the project. Sorry, skyline junkies. You can probably forget about blocking the Marriott now. :P

I'd consider building the hotel on the 1/2-acre site now, and leave the option to build on the air rights above, so that he can add condos or whatever he wants later when the market ripens.

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I think Empire's falling out with Ashley Christensen has slowed down plans to bring more restaurants into their buildings, but it makes the plan to "outsource" the hotel managment easier. Klimpton probably wants full control, and will get it with this property. It would have been good if someone like the group behind Lucky 32 and the O. Henry hotel in Greensboro could be involved, but they've had trouble of late, closing the Raleigh and W-S Lucky 32 locations.

As a pure hotel, I wonder how many stories it will rise. Walking around last night, they have started to pave Lenoir between the parking deck and the CC, but Lenoir is quite limited/closed from Wilmington to McDowell.

I don't know what the premium apartment market would be in that part of dowtown. The Sir Walter is the only other comparable, and Walnut Terrace and Heritage Park are close as well.

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  • 1 month later...

^ Basically, the city gave Empire an extension (until Nov. 1) to submit a new plan and obtain financing. I believe they are planning to do a smaller hotel on part of the property and maybe an office component later. The city needs hotel rooms, so that's what they are pushing for ASAP. Empire is pursuing a partnership with Klimpton Hotels. See below.

Here's the N&O's take.

Pretty interesting how the mayor did a 180 on this. He originally supported Allen's plans for new RFP on site 4, saying the RFP "recommendation makes sense" and now votes for the extension (it was unanimous).

"To give a guy like Greg, who has done a lot for the city, a little extra time seems appropriate," Koopman said before today's meeting.

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^ Basically, the city gave Empire an extension (until Nov. 1) to submit a new plan and obtain financing. I believe they are planning to do a smaller hotel on part of the property and maybe an office component later. The city needs hotel rooms, so that's what they are pushing for ASAP. Empire is pursuing a partnership with Klimpton Hotels. See below.
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OK, I hadn't checked online until just now... City Manager Allen is pushing to cancel Empire's agreement again, because Empire refuses to agree to pay to widen Salisbury Street, a cost of $50k, BEFORE the final land purchase has closed. The city had included that as a condition for extending the agreement, so here we are. Stay tuned tomorrow at 1pm.

N&O & WRAL

Empire could be asking for trouble by not trying to compromise a bit on this. Anyway, I don't really care how it gets resolved anymore. I say do what will get a hotel on the ground ASAP. To me, the best way to do that is by working with Empire to get a deal done somehow. It is frustrating that the city staff can't get this done without bringing the council back into it.

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I think the city council should either a) add the $50k cost for Salisbury Street to the asking price for the land or b) offer to pay Empire back WITH INTEREST if Empire does not end up purchasing the land. $50 k seems like pocket change compared to the $1.44 M for the land.

It seems someone else wants in now that the pieces are starting to fall into place downtown, and they're trying to get Allen to nudge out the local guy who has helped get downtown to where it is today.

Ashley Christensen was working with Empire to help with their restaurants, starting with Morning Times/Times Bar, and then (at the time) a restaurant on the corner of Hargett and Wilmington (which is now going to be the restaurant by the Neomanade folks) and the restaurnat/bar in the Lafayette. But there was some falling out, and Christensen moved on and opened the revamped Poole's.

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Summary from the meeting:

  • the Salisbury widening was for a drop-off lane for hotel guests

  • the city agreed to give Empire until November and add the street work to the property closing

  • Empire is working with Kimpton Hotels to manage Lafayette (we knew that) and help design the project

  • Empire's new plan is to split the site into north & south sections, with Lafayette on the Lenoir/Salisbury (N) corner & a future office/condo project on the S end

  • new plan is ~14 stories/200 hotel rooms with zero condos

  • Empire is in talks with 7 financial insitutions and is confident they will achieve project funding by November 1

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It should be noted that when RFPs began for Sites 1 and 4 there was very little interest from developers. Now, under current economic condtions that will probably last into 2010, this interest would be even lower. Its short-sighted to pull this project thinking that something better is waiting in the wings.

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Summary from the meeting:

  • the Salisbury widening was for a drop-off lane for hotel guests

  • the city agreed to give Empire until November and add the street work to the property closing

  • Empire is working with Kimpton Hotels to manage Lafayette (we knew that) and help design the project

  • Empire's new plan is to split the site into north & south sections, with Lafayette on the Lenoir/Salisbury (N) corner & a future office/condo project on the S end

  • new plan is ~14 stories/200 hotel rooms with zero condos

  • Empire is in talks with 7 financial insitutions and is confident they will achieve project funding by November 1

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I can understand the dilemma that the city is faced with. On one hand, they really do need to be concerned with the immediate hotel needs generated by the opening of the RCC and the risk of further delays by Empire, but on the otherhand, they've also got to be sensitive to Greg Hatem and his position. He has been and will continue to be a critical component in the revitalization of downtown and they could ill afford to alienate him at this point.

I do agree that the city needs to be more scrutinizing when if comes to development delays and evaluating what a developer can actually deliver, versus what they've promised to deliver. It doesn't bode well for the city when we continually receive impressive proposals for projects that never get delivered as planned.

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