Hotel Online 
News for the Hospitality Executive



 
Lack of Financing Puts Brakes on a $40 million Full-service Resort and Conference Center
 next to the Center Valley Golf Club near Allentown, Pennsylvania

By Scott Kraus, The Morning Call, Allentown, Pa.McClatchy-Tribune Regional News

June 5, 2009 - A tight construction financing market has again put the brakes on plans for a $40 million full-service resort and conference center next to the Center Valley Club golf course in Upper Saucon Township.

Developer Sierra Management purchased the club in March 2007, trumpeting plans to build a 200-room, four-star hotel catering to businesses on 16.5 acres at the southwest corner of Center Valley Parkway and Saucon Valley Road

Township officials approved plans for the Saucon Creek Resort in April 2007, and the Doylestown-based company predicted construction would begin that fall.

But work has not begun. The economic climate made it impossible to put together financing for the project, Sierra President Greg Kessell said.

"If someone were to walk up to me and say they were ready to do the financing, I'd say let's go," Kessell said. "We have a number of people interested in doing this with us and operating the facility. The problem is they simply can't move forward. It's on hold because it just can't happen right now."

Kessell said he remains optimistic that when the economy rebounds, investors will take their money off the sidelines and financing for the project will be easier to get.

"We're prepared, and when that's going to happen, I don't know," Kessell said. "We've spent a lot of time and effort getting the plans approved. I certainly hope it's going to be built."

It's not the first time the project has stalled. Sierra Management has had designs on the property since 2001, when company officials predicted a 2003 opening. But construction of the resort -- which was to be modeled after Greywalls, an 18th-century resort in Muirfield, Scotland -- was put on hold later that year when the economy slumped following the Sept. 11 attacks. The company purchased the property outright in 2004.

The proposed conference center would be at the heart of Stabler Corporate Center, a busy office and commercial center near the intersection of Route 309 and Interstate 78 that includes the Promenade Shops at Saucon Valley and the headquarters of Olympus America.

Stabler Land Company president Robert Bower said the convention center remains a good fit for the area. Stabler has little control over the project because it sold the land to Sierra.

"We do have Olympus and Dun & Bradstreet and we thought we were going to get Sanofi-Aventis, but [the planned conference center] complements the office and the shopping center tremendously," Bower said.

It's not the only high-profile hotel and resort project to be placed on hold in the Lehigh Valley as the economy has soured over the past year.

In November, Sands halted construction on the hotel that it plans to erect next to its South Bethlehem slots casino, which opened May 22.

Sands officials said in April that they would restart construction on the hotel and conference center, which is about 25 percent complete, as soon as financially possible, but those plans are not imminent.

Kessell pointed to the stalled Sands project as evidence of the shortage of financing.

"With the deep recession of the last year and a half, and the turmoil in the markets, now is just not the time to start it," Kessell said.

scott.kraus@mcall.com

610-820-6745

-----

To see more of The Morning Call, or to subscribe to the newspaper, go to http://www.mcall.com.

Copyright (c) 2009, The Morning Call, Allentown, Pa.

Distributed by McClatchy-Tribune Information Services. For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA. Tokyo:8918, NYSE:DNB, NYSE:SNY,




To search Hotel Online data base of News and Trends Go to Hotel.OnlineSearch
Home | Welcome| Hospitality News | Classifieds| One-on-One |
Viewpoint Forum | Industry Resources | Press Releases
Please contact Hotel.Onlinewith your comments and suggestions.