|By Andrew Abramson, The Palm Beach Post,
Fla.McClatchy-Tribune Regional News
January 22, 2010 --WEST PALM BEACH -- An 85-year-old building at the heart of Clematis Street could become a selling point for downtown tourism.
But before the Comeau Building, at 319 Clematis St., is converted into a 150-room boutique hotel, city commissioners on Monday will debate whether it's viable to back the project by selling $50 million in tax-free, municipal bonds.
The Comeau Building, a 10-story office building that opened in 1925, has hit tough times. Last year Bank of America filed a $13 million foreclosure against the owner, Chicago-based NCP holdings. John Quinn, NCP's owner, said he worked out an undisclosed settlement agreement.
Quinn believes that by working with the city, which would form a non-profit organization to buy the building at market price and allow NCP to develop a hotel, the Comeau Building will become an economic stimulus for downtown.
"Having up to 300 plus people at peak time on Clematis Street with money in their pockets to spend is a huge benefit to all area businesses," Quinn said. "It will help to stimulate business growth, attract new businesses, and create up to 150 construction jobs and approximately 100 permanent jobs downtown."
A lack of downtown hotels is a sore point for the city. The Hyatt Place at 295 Lakeview Ave. was the first new hotel in downtown in 30 years when it opened in 2009.
There's still no convention center hotel, six years after the city's $80 million convention center opened.
Yet not all the commissioners are sold on the Comeau plan.
While commissioner Kimberly Mitchell said she's interested in hearing city staff's arguments in favor, her instincts tell her that it's not in the city's best interest.
"The hotel business is not a core business that the city should pursue," Mitchell said. "It's one of the riskiest businesses, even for the private sector."
Quinn said he had planned to go ahead with the conversion himself, but that he couldn't locate the private financing once the market crashed.
While private financing is hard to come by in the current climate, Quinn believes the city is in position to get a good deal.
"In this environment, which is one of the worst in quite some time, the studies from our consultant still indicate a demand for the hotel, and that the hotel will be supported in downtown," Quinn said.
Quinn said the building's interior would need to be gutted to undergo a complete remodel. As soon as the project is approved, he said construction could move quickly and be completed in less than 14 months.
The $50 million would cover the purchase of the building, the construction and a significant amount of money of reserves, Quinn said.
The city initially worked with Quinn to convert both the Comeau Building and an office building on Fern and Dixie into a hotel.
Quinn said the Fern and Dixie project was scrapped after a study by a consulting firm didn't support the conversion. But he said the same firm believed a hotel on Clematis would be a success.
Commissioner Bill Moss said that NCP has agreed to guarantee expenses for 3-to-4 years if the hotel occupancy levels aren't high enough.
Moss said a lot should weigh on the opinion of finance director Randy Sherman.
"It's a big expense," Moss said. "Do we want the city in debt? How much of the risk does the city have to take on, and how much risk do the current owners take on?
"If (Sherman) says it's a major risk for us, I'm not sure it's going to pass. If it's a minor risk, we have a boutique hotel right in the middle of Clematis."
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