Civic center hotel a casualty of slowed economy?

The hotel development firm building a 143-room Courtyard by Marriott adjacent to the Houma-Terrebonne Civic Center has had to secure another lender, pushing back groundbreaking for the hotel, Terrebonne Economic Development Authority CEO Mike Ferdinand told the Parish Council’s Policy, Procedure, and Legal Committee last week.

San Antonio-based K Partners Hospitality Group, which is currently interviewing subcontractors, has 50 percent financing in place for the $18 million hotel through the new lender. The remainder is being funded through mezzanine financing, which demands less due diligence from the lender.

Financers are “evaluating the community,” Ferdinand said. “There were not a lot of reports about Terrebonne and how it was recovering (from hurricanes Gustav and Ike).”

K Partners anticipated a September groundbreaking. However, residential real estate held by K Partners’ original lender was affected by the financial crisis last year.

“This piece of their portfolio limited whether they could move forward,” Ferdinand said.

K Partners has 10 months from the act of sale to begin construction, or the developer would be in violation of its contract with the parish, Ferdinand said.

“If this thing does not move forward, we will revisit the agreement,” he said.

At a Terrebonne Parish Council meeting on October 22, 2007, K Partners told the council that the group would build a Hilton Garden Inn at the civic center site. TEDA had recommended K Partners to the parish council at the meeting as the developer.

In early 2008, K Partners informed the council that the hotel would be a SpringHill Suites, but Marriott approved the development of the Courtyard by Marriott on Feb. 22.

Last week, Councilman Clayton Voisin told Ferdinand, “The things you told us about this group (K Partners) are not happening.”

Before K Partners was tapped by the parish council, another developer had offered the parish 50 cents more a square foot than K Partners to purchase the parish-owned land for the hotel.

However, the developer initially stated he would spend less money building the hotel than K Partners.