|By Paul Gordon, Journal Star, Peoria,
Ill.McClatchy-Tribune Regional News
Mar. 20, 2010--PEORIA -- With his financing finally in place and new designs nearly completed, Gary Matthews will bring a revised Downtown Hotel Marriott project agreement to the Peoria City Council on April 20, he said Friday.
It is in that agreement final project numbers will be detailed, including that the city's bonding obligation will be $2.3 million lower than in the original agreement approved in late 2008 even though the total cost of the project remains about $102 million, Matthews said.
Matthews said he expects to close on the properties involved in the project site, including the Hotel Pere Marquette, by the end of May. He wants to begin demolishing this summer the properties that will be razed to make way for the new Marriott Courtyard tower, parking deck and skywalk leading from the hotel to the Civic Center.
That includes Big Al's and other properties on that block owned by Al Zuccarini, whom Matthews said "has been very cooperative and very patient waiting for this to happen. I have a tremendous amount of respect for him."
Once started, Matthews said he expects completion within three years.
"It has taken me a lot longer to reach this point than I expected. I didn't see the recession coming, especially one that deep. Even so, I never thought it would be so tough to finance a project that is 50 percent equity," Matthews said.
"I'm excited. Things are falling into place."
Matthews said three of the lenders are local and two are from out of state. He declined to name them.
A 30-year management agreement with Marriott Corp. is signed and architects are putting final touches on designs, including changes to original plans. Marriott wanted the changes to bring the Pere Marquette up to 4-Star standards.
The Marriott Pere Marquette will be a full-service hotel and contain 284 of the 401 rooms. All the rooms will be gutted and redesigned, most of them enlarged to meet Marriott room size standards and more will be converted to suites.
The existing lobby and common areas will be gutted, all electrical and life safety needs will be met and new windows installed. A pool, spa, two bars and a three-meal restaurant will be in the Pere side, along with refurbished ballrooms.
"Marriott wants the Pere to be the centerpiece of the project. It believes in that space, believes it can be a 4-Star space that will be the standard other hotels will have to compete against," Matthews said. He added that is why the project will cost the same as originally set even though there will be about 70 or so fewer rooms.
The new part of the project will be a Marriott Courtyard with 117 rooms. It will be a "special service" hotel, but at the higher end of that type of hotel, a step down from a full-service hotel.
It will be designed so that another 100 rooms can be added later, if needed, he said.
Matthews said he expects the Pere Marquette side will average $160 a night, with the Courtyard side averaging $145 a night. The average rate at the Embassy Suites in East Peoria is $179 a night, he said.
The main reason the city will be asked to issue a lower amount in bonds -- about $37 million -- is that municipal bond rates have dropped in the last year. Bonds with a rate that is 1.8 percent lower will save about $660,000 a year.
According to the agreement, Matthews added, over the life of the bonds the city will receive payments of $40 million. "This project, like every project I do, will support itself. The city is not 'giving' me anything. It is investing in a project that will help the Civic Center and the whole community."
He said he has a history of paying off bonds early, such as the bonds for the East Peoria Riverside project that were paid off in little more than half their 12-year term.
Matthews said he also has a history of reinvesting whatever developer fees he gets from a project and intends to do so this time, as well.
Responding to those who don't believe this is not the right time to do the project or that it is too big, Matthews said the opportunity should not be missed.
"We have a window of opportunity now. To compromise and do less than the best now would be wrong. I really believe we have underrated the potential of the Downtown long enough," he said.
If this project brings in more and larger conventions, Matthews said, other Downtown hotels "will have a huge opportunity from just the overflow. We're only going to be 401 rooms. More than that will be needed."
Paul Gordon can be reached at 686-3288 or email@example.com.
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