Hammons' financing issues start to spread

Wilmington, N.C., Denton, Texas, and Colorado Springs, Colo., each share a common denominator. Each has had a John Q. Hammons Hotels & Resorts project slowed or stopped due to financial shortcomings.

Construction firm Flintco Inc. and Hammons Hotels officials are negotiating a $25 million dispute regarding a 300-room Renaissance Hotel on hold in Colorado Springs.

Hammons has nixed a $50 million hotel project in Wilmington, N.C., according to a letter sent to the city from Justin Harris, the company’s senior vice president and general counsel.

And the mayor in Denton, Texas, said plans are on hold for a hotel on University of North Texas-owned property due to financial reasons.

Colorado Springs in limbo
The Colorado Springs hotel, a $90 million Renaissance Hotel Spa and Conference Center that started construction April 28, 2008, has been on hold since Oct. 31, 2009, when a $24.6 million mechanic’s lien was filed by its general contractor, Tulsa, Okla.-based construction firm Flintco Inc.

John Q. Hammons isn’t the only developer dealing with financing woes, said Dana Birkes, Flintco vice president.  

“That’s occurring all across the country with all kinds of projects,” Birkes said. “When you’re dealing with the economy the way it is right now and lending institutions and restrictions on those and the lending requirements, it definitely has turned the industry upside down as far as their ability to get projects done or funded.”

Officials at Hammons Hotels, which operates more than 80 properties nationwide, did not return calls seeking comment for this story.

Harris said in a statement Sept. 10 the company hopes to see the project completed, and the developer is moving forward with Flintco to determine the best course of action. Birkes also is confident that the situation would be resolved.

Flintco’s project diversity has protected workers from job loss, she said.

“We have found places for everyone. People are working on other projects through our company,” Birkes said.

Wilmington a no-go
Hammons Hotels’ plans for a 14-story, 260-room Embassy Suites in Wilmington, N.C., have been shelved.

Harris sent a reply Aug. 31 to a city ultimatum that requested a written agreement from Hammons for hotel construction, said Steve Bridges, assistant for development to Wilmington’s city manager.

“We have all been patient during these past several months in evaluating the city’s requirements and the feasibility and timing of this project in our company’s development schedule,” Harris said in the letter. “We are not in a position to move this project forward with a written development agreement.”

The company is committed to other projects ahead of Wilmington, and the inability to manage the city-owned convention center next to the proposed $50 million hotel was a challenge, Harris’ letter said.

“I think Mr. Hammons is sincere in his desire to do the project,” Bridges said. “The economy has just got him and others in a quandary right now.”

The city accepted Hammons’ hotel proposal Jan. 29 but no contract has been signed.
No contractors have been hired, he added.

Denton, Texas, and Osage Beach
In Denton, Hammons halted a proposed hotel and convention center in mid-August, also due to financing issues.

Denton Mayor Mark Burroughs said plans are on hold for financial reasons, but he remains hopeful after speaking with Hammons representatives.

The project reportedly was stopped with the contention that Hammons come up with $50 million for the project to continue. The city put up financing for the convention center but is waiting on developer funding for the hotel, a report in the North Texas Daily newspaper said.

In Osage Beach, plans were announced in March 2007 for a $100 million, 15-story, 320-room Chateau on Lake of the Ozarks on 30 acres near the lake’s Grand Glaize Arm.

The hotel was scheduled to open in spring 2010, but plans were delayed by a lawsuit filed in December 2007 by Four Seasons Marina Rentals Inc. regarding a $3.7 million tax increment financing district approved with a designation of blight.

Senior Judge B.C. Drumm Jr. issued a declaratory judgment March 8, upholding the TIF district’s constitutionality, giving the city of Osage Beach the legal green light for Hammons to build the hotel.

Osage Beach administrator Nancy Viselli and Mayor Penny Lyons were out of town and unavailable for comment.

What about Springfield?
Requests for proposal for an analysis of how to best use 1.7 acres between the city-owned Expo Center and Hammons’ parking garage were due Sept. 15 to the Springfield Convention and Visitors Bureau.

One member of the Convention Attraction Task Force said the need is clear.

“There has to be a hotel property next to the Expo Center,” said John Ford, the CVB’s past board chairman. “There must be, for us to proceed as a city from a tourism vantage point, a destination for meetings, groups and conventions. We have to have a hotel next door. It doesn’t matter if it’s Mr. Hammons, or someone else.”

Ford, who is on the task force with Hammons Hotels Senior Vice President of Development Scott Tarwater, said Hammons has an Embassy Suites hotel designed for the space.[[In-content Ad]]