|By Steve Lackmeyer, The Daily Oklahoman|
Knight Ridder/Tribune Business News
Oct. 20, 2004 - One-third of a team attempting to redevelop Oklahoma City's Skirvin Hotel has dropped out of the project -- but the remaining partners say the project remains "on track."
Austin-based FaulknerUSA was an equity partner in the $46.4 million plan to renovate the landmark and reopen it as a Hilton Hotel.
When Skirvin Partners was first formed, the company was hailed as a "recognized expert in orchestrating public-private developments" and a leading national developer of public private hospitality projects.
John Weeman, a former Hilton executive who assembled the Skirvin development team, said FaulknerUSA originally entered into the project with a plan that called for Oklahoma City to contribute up to $10 million to cover a gap in financing the project.
That deal changed last summer when both sides agreed to different terms that required the city to pay up to $18 million that it would recoup if the hotel operation is profitable.
"In our exploration of various private side financing alternatives, the financing concept for the project has evolved with respect to the private equity element," Weeman said Tuesday. "This resulted in the project not fitting the business objectives of FaulknerUSA."
The team still includes Weeman's Partners in Development and Marcus Hotels and Resorts.
Weeman said a new equity partner already has committed to the project and terms previously agreed to by the development team and the city. He said the new partner's name won't be disclosed until the change is approved next month by the Oklahoma City Urban Renewal Authority.
"It just hasn't been a great fit for FaulknerUSA, but it's a great fit for this new partner," Weeman said. "They're stepping into the deal that's already been made, and they're accepting assignment of Faulkner's interests."
A sale of the hotel to Skirvin Partners originally was scheduled to close Oct. 1. Weeman said a delay in the closing to January is unrelated to the partnership change.
The Skirvin Hotel opened in 1911 with two 10-story towers containing 224 rooms. In 1930, a third wing was added, raising the structure to 14 stories and increasing capacity to 525 rooms.
The hotel, on the National Register of Historic Places, closed in 1988 and has been empty since. The city bought the property two years ago for $2.875 million, and Skirvin Partners was chosen as redeveloper last year.
The $46.4 million redevelopment would include restoration of the original exterior finish, installation of historically accurate windows, reconfigured guest rooms and new guest elevators.
The hotel will feature a restored lobby and 14th-floor Venetian Room, restaurant, lounge and new meeting rooms.
Weeman said he still hopes the hotel will open in 2006. JoeVan Bullard, director of the Urban Renewal Authority, said the city will start asbestos removal within the next several weeks, and the hotel sale to Skirvin Partners should be complete by January.
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