News for the Hospitality Executive
Boston's First Skyscraper, the Ames Building, Receiving
a $75 million
Transformation to a 115 room Hotel to be Operated by
Morgans Hotel Group
NEW YORK, MORRISTOWN, N.J. & BOSTON - -June 17, 2008--Morgans Hotel Group Co. (NASDAQ: MHGC) ("MHG"), Normandy Real Estate Partners ("Normandy"), one of the largest real estate owners and operators in the Boston to Washington, D.C. corridor, and local partner Ames Hotel Partners today announced a new joint venture to develop The Ames Hotel in Boston, MA. The Ames, located near Government Center, Boston Common and Faneuil Hall, will be operated by MHG under a long-term management contract and is expected to open in the third quarter of 2009. The Ames will represent a new addition to the MHG brand portfolio.
The project will redevelop a historic Byzantine and Romanesque-style office building known as The Ames Building, which was constructed in 1889 and is listed on the National Register of Historic Places. The building was Boston's first skyscraper and remains one of the tallest masonry buildings on the East Coast. The property is located just off Washington Street Mall and near the desirable residential neighborhood of Beacon Hill, and has significant outdoor space for food and beverage operations in a heavily trafficked pedestrian walkway. Upon completion of the project, The Ames is expected to have approximately 115 guest rooms, a restaurant, bar and exercise facility.
"The Ames marks our entry into Boston, a highly desirable market that matches MHG's target demographic for its metropolitan properties," said Marc Gordon, Chief Investment Officer of MHG. "This landmark building, conveniently located near Boston Common and other tourist destinations such as Faneuil Hall, made history as Boston's first skyscraper and, together with Normandy, we expect to make history again by introducing innovative design, surprising amenities, a compelling social scene, and a staff committed to always exceeding our guests' expectations. Work on the property is already underway and we look forward to bringing the MHG experience to one of the oldest cities in the U.S."
"A major element of MHG's growth strategy is the identification and development of new hotels in attractive, gateway cities," said Fred Kleisner, President and Chief Executive Officer of MHG. "Boston has been high on our list and we are thrilled to announce our plan to develop The Ames into a brand new MHG hotel in one of the most desirable locations in the city. The Ames will attract tastemakers of all ages who especially appreciate the vibe created by our hotels because they are passionate about their guest experience. From a financial perspective, we expect The Ames, once completed, to contribute quickly to MHG's EBITDA."
"We are extremely pleased to be partnering with MHG on this exciting project," said David Welsh, a founder and Managing Principal of Normandy. "We are more confident than ever that The Ames will become Boston's premier boutique hotel, befitting its treasured place in the city's history."
"Normandy appreciates the cooperation and role that both Mayor Menino and the Boston Redevelopment Authority continue to play in returning this landmark property to its former glory," said Justin D. Krebs, a Normandy Principal responsible for the firm's New England portfolio.
The total development budget for the project is approximately $75 million with MHG committing $10 million for a 35% interest in the joint venture. The project is expected to qualify for federal and state historic rehabilitation tax credits. Normandy has closed on a development loan from UBS for up to $46.5 million.
About Morgans Hotel Group
About Normandy Real Estate Partners
About Ames Hotel Partners
Forward-Looking and Cautionary Statements
Statements contained in this press release which are not
historical facts are forward-looking statements as the term is defined
in the Private Securities Litigation Reform Act of 1995. These forward-looking
statements can be identified by the use of words such as "expects," "plans,"
"estimates," "projects," "intends," "believes," "guidance," and similar
expressions that do not relate to historical matters. These forward-looking
statements are subject to risks and uncertainties which can cause actual
results to differ materially from those currently anticipated, due to a
number of factors which include, but are not limited to, downturns in economic
and market conditions, particularly levels of spending in the business,
travel and leisure industries; hostilities, including future terrorist
attacks, or fear of hostilities that affect travel; risks related to natural
disasters, such as earthquakes and hurricanes; risks associated with the
acquisition, development and integration of properties; the seasonal nature
of the hospitality business; changes in the tastes of our customers; increases
in real property tax rates; increases in interest rates and operating costs;
the impact of any material litigation; the loss of key members of our senior
management; general volatility of the capital markets and our ability to
access the capital markets; and changes in the competitive environment
in our industry and the markets where we invest, and other risk factors
discussed in MHG's Annual Report on Form 10-K for the fiscal year ended
December 31, 2007, and other documents filed by MHG with the Securities
and Exchange Commission from time to time. All forward-looking statements
in this press release are made as of the date hereof, based upon information
known to management as of the date hereof, and MHG assumes no obligations
to update or revise any of its forward-looking statements even if experience
or future changes show that indicated results or events will not be realized.
Morgans Hotel Group
|Also See:||Big Niche for New Hotels in Boston and Cambridge: Sixteen New Hotels Have Opened in the Last Five Years, Four More Scheduled for 2008 and 2009 / June 2008|
|Morgans Hotel Group Co. Acquires the 194-room James Hotel in Scottsdale; Will Re-Brand as Mondrian Scottsdale, Don Jacinto Named General Manager / May 2006|