|By Tom Daykin, Milwaukee Journal
SentinelMcClatchy-Tribune Regional News
Apr. 21, 2010--The Village of Menomonee Falls has entered the hotel business, thanks to $17.7 million public loan to complete a long-stalled project.
The Village Board Monday night approved selling bonds to finance the conversion of the former Falls Inn into a 135-room Radisson Hotel. The $17.7 million loan, plus interest, is to be repaid to the village by 2026 by Lodging Investors of Menomonee Falls LLC, an investment group formed by Madison-based Professional Hospitality LLC.
The Radisson, which will include an indoor pool, RBG Grill restaurant and a banquet room, is to be completed by Jan. 1 at W14776 Main St., just west of Highway 45. Professional Hospitality, which operates 16 hotels in Wisconsin, Minnesota and Colorado, is led by its president, Dean Grosskopf.
Board members voted 6-0 to approve the loan because Lodging Investors has been unable to obtain private financing to complete the project, said Village Manager Mark Fitzgerald. Without the village loan, the project likely would not be completed for several years, he said.
"That simply was not a viable alternative," Fitzgerald said Tuesday. He spoke after the Community Development Authority approved a new development agreement among that agency, the Village Board and Lodging Investors.
A long wait would have continued to leave an eyesore at the high-profile construction site, which village residents see as an embarrassment, Fitzgerald said. The site, visible from Highway 45, is marked by the five-story former concrete shell of Falls Inn.
Also, the village's larger redevelopment plan for Main St., which envisions new housing and retail, will have trouble attracting investors as long as the hotel remains unfinished, Fitzgerald said.
The dilapidated Falls Inn was largely demolished in 2008, and the remaining shell will be redeveloped into the Radisson.
Construction stopped after the September 2008 collapse of Lehman Brothers, which led to a freeze in the commercial credit markets, Fitzgerald said. The village loan, he said, amounts to "a one-time only issue" because of those circumstances.
The loan will be broken into two parts, Fitzgerald said. The first portion has a four-year term, which will be replaced in 2014 by a longer term loan. The loan's initial annual interest rate will be around 4% to 4.5%, he said.
Grosskopf and the other owners of Lodging Investors are providing personal guarantees for the loan, which also is secured by the hotel, Fitzgerald said. Additional security includes a $1.25 million bank letter of credit provided by Lodging Investors that's designed to cover any short-term financing gaps, he said.
Grosskopf didn't return a call seeking comment.
Minneapolis-based Carlson Hotels, which franchises the Radisson brand, in March announced plans to expand and upgrade the brand, according to travelpulse.com.
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