First of all, the Bentley is an invaluable part of our local history and in my opinion needs to be a monument to our history, not a grave marker to our folly. With the impetus to "Save the Bentley", let us realize several observations that should guide our actions as citizens.
(1) Bob Dean LLC purchased the Bentley for 5 million in 1998 - The current sale price of 12.5 million appears to be exorbitant in light of the fact that maintenance was lacking and a city water main burst and flooded the basement causing extensive damage as well as property values have not appreciated to that extent in our area. I do not recall a bidding war between prospective buyers either.
(2) The Hotel Bentley ability to book rooms was reliant on the Riverfront Convention Center for convention bookings that were anticipated and never materialized and are not present today. Hence, downtown development must be more solid before there is a revenue base for the hotel.
(3) The city's penchant for using your tax dollars for questionable real estate development is well documented for those that care to remember or research the facts.
(4) Doesn't Bob Dean deserve consideration for "cooperative endeavors" as much as Cyntrenics and wouldn't it be a lesser debt load for the city since he already owns the property needing only assistance with garnering business and renovation, not the additional revenue needed for acquisition?
I am sure there are more observations, but these get us started on a discussion.
The current deal stinks and the city needs to run from it like a three week old can of bad tuna.
14 comments:
First get your facts straight - the purchase price is $6.8M not $12.
Second Cyntreniks is spelled c-y-n-t-r-e-n-i-k-s.
Third, the marketing plan for Second Century Bentley, LLC is not dependent on the Riverfront Center. If you want to complain about its lack of use call a city councilman. They just renewed the CVB's management contract for that facility.
Fourth, Bob Dean filed a demolition permit for the Bentley. DID YOU FORGET THIS????? If he can't use it for low income housing he's going to tear it down.
There was a buyer, with money in hand who was quickly shoved aside for the city council and their chosen group Centreniks (sp). The buyer had enough working capital to purchase, renovate, and run the Bentley. However, just before the buyer and partner were to enter the building to determine the extent of renovations needed, they were quickly dismissed with an "oops, someone else offer to buy it, and were going with them". So how did the city get involved with this company, when did discussions take place, what was said, and by whom??? Was any money discussed between the city and the company then??? These are the real questions, not to mention why is it that a buyer who needed no help from the city is turned down and an offer from a group that apparently can't perfect the sale on their own is granted the first offer??
OK Bird,
I will concede to points one because you are right. Point two because I have not taken to the time, but will to check your figures. Point three goes straight to the heart of the economic viability of the Hotel Bentley regardless of who owns it including and public participation.
Point four deals with someone who already owned and operated the hotel and had asked for help from the city previously, as in living up to promises that were made to him that the Riverfront convention business would increase.
The main point is that Chanel No. 5 cannot mask the smell of spoiled tuna. The deal as it stands still STINKS!
Why does it stink? The Holiday Inn, formerly Hilton was developed as a public-private partnership. How soon we forget - I guess 20+ years is a long time.
Has anyone ever considered the fact the investors are trying to get the best price for the money they are borrowing? Think about this - as a commercial entity you can go to a bank and borrow money on the open market at the going rate - let's say 8.5% if you're lucky. However, with some loan guarantees or private participation that rate can be driven down 1 or 2 points. Over the life of the loan, that's a HUGE savings. Can you fault business people for trying to make a SMART business decision? Saving money on the front end allows more funds to be available to capitalize the project, provide for rehabilitation, and the overall feasiblity of the project. This is basic business finance 101.
There are still some of us who do not believe that govenment should be in partneship with private business. Under no circumstances should the City provide any benefits to the proposed Bentley purchasers than those availble to all businesses in town. If the Bentley is so historically valuable, then the City itself should purchase it on the open market.
Bird,
1. The deal has been in the works long enough to have had the property appraised. As long as the deal is private, the appraisal remains private. Public funds make it public business and I am going to guess that The Bentley will not appraise for 6.8 million. It is my estimation that the investors (sic) don't have any walk around money and are resorting to OPM for both the purchase and renovation and probably for operating capital. No lender is going to budge unless they see some property value and operating capital - in the bank.
2. A city water main broke and flooded the basement. It stands to reason that there is possible foundation scouring and mold propagation, all of which need to be verified by an engineers report prior to involving the citizens with a problem property. ( It has happened in the recent past - remember mold in Regions Bank that the city found after the sale?)
3. It is hard to believe that the Bentley has appreciated from $5 mil to $6.8 mil after it closed down due to insufficient revenue due to lack of bookings. There is a location problem. An income approach appraisal would verify this and will be required by a lender to verify a viable location. That leads me to the conclusion that the public will be aiding an overvalued sale and will more than likely not recover its funds.
You and I disagree on the fundamental role of government which leads me to disaprove of any public funding of private ventures as that indicates excess revenues collected that should be returned to the taxpayers or applied to accelerate payment of bonds.
I feel the Bentley deal, as structured, is overpriced and not able to be properly funded by the investors. That does not need to become the public's liability.
12.2 is the asking price, 4.58 mil the appraised value according to this article;
http://www.katc.com/global/story.asp?s=5341947
That is what happens when one shoots from the lip.
checking 1234
$12.2 may have been his last asking price, but is not what has been negotiated for the purchase price. Yes, an updated appraisal is in order, and has been ordered. I stand behind what I posted as the purchase price.
Just because the city is being asked to participate does not mean they are being asked to put money INTO the project. There is a difference in providing a mechanism for financing and actually paying for something.
KACT reported things correctly at that point in time.
Bird,
You make my point for me. There is a 2.22 mil drift between the sale price and the last publicly reported appraisal figure (No mention of the date of appraisal was made so we don't know how old it is) which means the next appraisal is going to have to increase 2.22 mil to meet the sale price which may (1) indicate a bogus appraisal (2) The need for $1,020,000.00 in cash at closing at 6.8 mil appraised value because 85% is usually the maximum loan for motel properties and cannot be borrowed funds so that leaves the city out of providing the downstroke.
If the city is going to participate, then what is their role to be? Will the city be on title? I do not know any lenders that will co-lend and the city is not a bank.
Providing a mechanism for financing entails an obligation and if the city has no titled interest in the property - it has no control in the outcome if the property is foreclosed in the future. As a citizen, I want to know what my city's security position is.
I am quite sure that as more details surface, as Alice said "Things become curiouser and curiouser."
IF the city provided the mechanism for financing the only way they could would be to hold the title. That is of no question.
The real question is this - does the City have an "interest" in the re-opening of the Bentley? An by interest here I mean will they benefit? Is there a reason for cause?
In regards to the appraisal - is it possible - note the word possible - that real estate values have INCREASED in Alexandria? Homes in Good Earth are now selling for $150K! That's up from $120K a year ago. Commercial property has been rising as well - whether the buildings have been closed or whether the land is considered a brownfield. Do you not recall this thing called a real estate bubble that has been driving prices out of sight? Granted, our values have not risen to the ranks of those in the NE or California, but prices in Central Louisiana have gone up.
Let's consider something different than the Bentley.
The City was asked to participate in the Union Tank Car deal, despite the fact the facility would be outside the city limits. Since you are opposed to public-private partnership and feel the private should be able to support its own business do you think the City should have stood aside and hoped the project would land in Alexandria or were they right in making the commitments they did to bring over 700 jobs to our area?
Bird,
Yes, we have experienced moderate appreciation in real estate values in our area so any negative impact from a nationwide deflation of values will affect us minimally. And income approach appraisal will be what drives the Bentley loan deal though.
The fact that Union Tank car is here is great but from what appears in the media, the city provides services - but collects no revenue - which means that they have a free ride as new citizens in our community when it comes to tax load. And guess what, Cleco provides electricity, not the city. (from recent ratepayer experience they may have fled if the city was their electric vendor)
Enough of the negative and on to solutions - it is becoming obvious through evolution of downtown that an area bouded by Elliot, MLK, Lee, and the levee could become the CBD with code emphasis on multi-story with street level boutique store front consideration. Parking would be multi-level also and taken into consideration as new plan conditions on a block by block basis. In the spirit of Al Gore's carbon credits, new development would have parking credits assigned to their development & redevelopment. Downtown property owners could then absorb the cost of proper parking or co-op with each other to make it happen with adjacent central parking garages. Nothing says they could not charge and make a profit.
An office-rich, multi-level district is a natural for what remains in the downtown area which is largely governmental services and other office space. Street level boutique shop & restaurant availability would enhance the experience of the workday for the many people that work downtown as well as build a small business base that draws people. And a people friendly environment is what is needed to surround the Bentley, no matter who buys it, for it to be a long term success.
In my opinion, the city's involvement needs to be limited to code restructuring and enforcement as well as infrastructure and service improvement - what the should strive to do best.
Carolyn and Civil,
It is good to see you again. Please contibute as often as possible as voices of reason are scarce.
UTLX - the city is providing every utility except electric. The city also paid for the bridge entrance from Hwy 1 along with the road upgrades necessary for the turning lane. Here's the question - why did the City do this and not the Parish? Because the City could. It's about a "greater benefit" - the City knew it would receive the greater benefit from persons being transferred down purchasing new homes, from the 700+ employees, many who live out of Rapides Parish, purchasing goods and services in Alexandria and of course, the upgrades to our existing wokforce located in Alexandria. The LTC received a huge benefit in the total redevelopment of their welding program, new equipment and electrical upgrades - all paid for by the State.
What you are proposing in regards to the CBD already exists to some extent. The boundaries were recommended further - from MacArthur to the River to the Purple Heart to I-49. Two planned districts, one centered around the medical district and one centered around the arts and media were proposed. Parking was addressed through a public/priavte partnership for the arts/media district since 2 private land owners have an entire vacant lot in the area of Coughling Saunders, the Kress Building, the Masonic Building, the Glass Tower and the Library. The first floor would be retail and office space. The private individuals were to receive their own separate entrance with a certain number of restricted spaces while the remainder of the garage would be open to the public. The new administration has not moved on this.
The parking towards the medical district can be handled through the existing garage next to the Holiday Inn and the two at the hospitals.
The final section of the downtown area - bounded by Jackson, the River, Johnston, and I-49 would be a connector - providing services to both districts - legal, banking, food, housing, training, etc.
Again, all of this was presented last August. Government wasn't going to put money into the projects, other than the parking garage, instead government was going to facilitate meetings to determine what needed to be in place to support the existing businesses, set a design in regards to street lighting and landscaping so you would know you had moved from one district to the next, provide signage, etc.
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