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Jan 06, 2010

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Bubba

"I guess that same logic could be made for downtown as well."

How many downtown businesses have out of town visitors who would likely choose this new hotel for overnight stays over the alternatives, particularly in the days of draconian oversight of corporate expense accounts?

Fec

Here's the allocation by County from the NC Treasurer.

Spag

@ Steve: "sometimes that first thing is the only thing that developers are really concerned about."

Exactly right. Similar to Enron where the real goal was to simply run up the stock price and cash them out, leaving the wreckage for everyone else. Of course, Enron wasn't the only outfit playing that game. This is why determining real value is critical.

Regardless, I reiterate that if this is such a profitable venture then the private sector does not need public funds to offset their risk.

Roy Carroll got the taxpayers to pay for his $1,000,000 penthouse. It's time for this kind of modern quasi-fascism to stop.

Fec

If the bonds were available, the property would have to qualify for and be designated a recovery zone.

Tim

idiot...this link shows Greensboro got over $38 million

http://www.greaterdiversity.com/index.php/gdn-news-resources-weekly-headlines/greater-diversity-news/minority-business-news/298.html

Fec

Brainiac, that's the whole ARRA allocation. Only $9.8M is for recovery zone facility bonds. At least you're trying.

Steve Harrison

Fec, I think the Recovery Zone thing only comes into play if the City wants the Federal government to refund 45% of the interest paid on the bonds. I'm pretty sure the bonds are available for use in other areas, you just don't get help with the interest.

Sam, I dig what you're saying, but keep this in mind: The main reason behind the stimulus is that, either due to lack of capital or fear of risk, private funds for projects across the board just weren't flowing. I'm not saying they should flow to unsound projects, I'm just saying a lack of private investor interest, in the middle of a recession, shouldn't be viewed as proof the project is unsound.

That makes more sense in my head than it does typed out like that, but I hope you get what I was trying to say.

Fec

Otherwise, you think Guilford and GSO are going to foot the bonds? Hilarious.

Fec

If the bonds aren't important, why did Bridget try to get HP's allocation?

Fec

From Amanda Lehmert at the N&R:

The developer still plans to ask the City Council to allow $30 million in federal Recovery Zone Facility Bonds to finance the project, plus $8 million from the city and county to build a parking garage on the site, Alston said.

Dissemble if you must, but that ain't what it says. If you know of some other bonds, please let us know.

Andrew Brod

Modern quasi-fascism? That's a dumb thing to call it. No matter how bad public subsidies like this are, they don't amount to fascism, quasi or otherwise. Misusing the term like this is a good way to undermine a sober and principled opposition to such subsidies.

Andrew Brod

Fec, if I'm reading the state treasurer's letter correctly, the $9.8 million figure applies to the portion of Guilford County outside Greensboro and High Point. My reading of this is that the county allocation can't be used within Greensboro.

There's a separate allocation of $19.1 million for Greensboro and $7.5 million for High Point. Of course $19.1 million is still well short of the $30 million reported in the N&R. Where do we think the $30 million figure is coming from?

(According to Spag, from Il Duce!)

Steve Harrison

It looks like you're right, Fec. I got that from a panel (Richard Quest, I think) where they talked about bonds being available for both depressed areas and non-depressed areas.

After checking, it appears they were talking about Build America Bonds and the Recovery Zone Bonds that are a subset of them, but the BABs are just for government infrastructure, not public/private economic projects. I don't know what the hell they were talking about. ;/

Fec

Agreed. Thanks. However, my reading indicates four GSO projects were submitted by the Dec. 15th deadline. Perhaps the earlier location of this project was among them. If so, and the new location qualifies, perhaps they can use that portion. And some may come from the statewide re-allocation. Still, it's not nearly enough.

Thus, Bridget's grab for HP's allocation.

Fec

Sorry. Disregard. Those projects obviously pertained to the county allocation. So, we know nothing about which projects GSO has submitted, if any. If they did not submit city projects by the deadline, and Brenda Jones Fox's letter indicates that may be the case, GSO has lost its allocation and must compete in the statewide re-allocation.

Tim

Clearly there is something you guys are missing. I think if there werent enough available all these smart guys at the Elm Street Center including Milton Kern wouldnt be partnering with Bridget in this project. Like I said if there werent enough it would have been reported in the News & Record and certainly city staff would have brought this up to Bridget and her team.

Fec

Don't disregard the projects as they are part of the GSO allocation.

Tim, by the time you grow up and get a driver's license you'll understand that public records do not lie, even if misread, and the N&R has a terrible history of cheering projects just as nebulous as this one.

Tony Wilkins

Here you go Andrew Brod (fec, I think you may already have this):

http://www.scribd.com/doc/24842436/Sh-of-1

http://www.scribd.com/doc/24842434/Sh-of-2

EZ Motorbikes

I can't help but wonder if "city leaders" and local developers even understand what a destination hotel really is. Example: Concord's destination hotel

Sadly, downtown Greensboro doesn't have ski resorts, beaches or even artificial destinations in which to put a destination hotel.

But reasoned thought won't stop it from being built and when Greensboro's "destination hotel" does a big fat belly flop a few years on down the road the same people who built it will rob us of more money to get the whale off the beach.

I mean, it's not like I'm not old enough to remember the last time this happened. History repeats itself and "city leaders" are either too stupid or too greedy to stop the madness.

Tim

well The Proximity is a "destination hotel" and there are no ski resorts nearby. In fact there is nothing nearby except for a shopping center. There are far more attractions downtown than there is near the Proximty Hotel. I don't know why people insist on treating downtown different from everywhere else in the city. When a developer proposes something like this anywhere else in the city no one says a word. The negative attitude towards development downtown is the reason we don't have a strong vibrant central core like our larger neighbors (Charlotte and Raleigh)

EZ Motorbikes

Tim wrote" "well The Proximity is a "destination hotel"

In what way, Timmy? What is it about the Proximity that makes people WANT to come to Greensboro? People stay at the Proximity while in Greensboro BECAUSE it's a very nice hotel only 15 minutes from the airport but they don't travel to Greensboro for nothing more than the EXPERIENCE of staying in the Proximity Hotel.

Then Tim wrote: " I don't know why people insist on treating downtown different from everywhere else in the city. When a developer proposes something like this anywhere else in the city no one says a word."

I don't recall the Proximity Hotel or any other area hotel getting $30 Million taxpayer dollars. Build anything you like on any property you own but don't ask me to pay for it so you can profit at my expense.

And finally Timbo wrote: "The negative attitude towards development downtown is the reason we don't have a strong vibrant central core like our larger neighbors (Charlotte and Raleigh)"

I guess you never stopped to consider the fact that MOST residents of Greensboro don't want Greensboro to become another Charlotte or Raleigh. I've been here in Greensboro for 53 years and have seen history repeat itself numerous times-- you are obviously a newcomer or in the pockets of those very same developers who continue to rape the taxpayers.

So Timbo, how much do you get paid to pitch downtown on the blogs?

Tim

I cant you believe all the spin. this project IS NOT costing taxpayers. Its a government loan and really its no different from local "government loans" or incentives. Roy Carroll received $200,000 from the city of Greensboro for his Center Pointe project.


As for being like Charlotte and Raleigh....no body is saying we want to be like them But I think most citizens want to see a vibrant urban downtown. I think Greensboro can become a "big city" without being like Charlotte or Raleigh.

Tim

People with your mind set is the reason this area has lost so many jobs. Resistant to change and growth is not good for any city. Do you want Greensboro to end up like Buffalo or Detroit? Fortantely Greensboro is starting to see the light and is becoming less of a conservative hick town as the older generation dies out. Greensboro is growing up whether you like it or not and I look forward to seeing the groundbreaking for this brand new downtown hotel :)

bubba

"....or in the pockets of those very same developers who continue to rape the taxpayers."

Well golly, gee whiz! You mean to say something like that actually happens in Our Fair City?

The only way this proposed hotel makes sense downtown as a destination attraction requires a revamping of the concept, and securing tribal casino property designation.

bubba

I left out one other qualification in my previous post: The economy needs to dramatically improve.

Tim

I dont think it needs to be a destination hotel. Hotels in Greensboro usually serve the business sector and convention industry. I think what makes this hotel such a good idea is the fact that it will have dozens and dozens of restaurants, entertainment options, theater and museums all in walking distance. I think its more appealing to stay at a hotel like this as oppose to some hotel off the interstate surrounded by big box retailers and cheap strip clubs. You naysayers just don't get it. The naysayers also continue to believe the spin that this project will cost taxpayers. Another thing people dont realize is that this hotel will cost much less than originally proposed. Thats because there will be no need to build meeting space thanks to the Elm Street Center. EZ Motorbikes said history repeats itself.....it sure does. Time after time the naysayers were proven wrong. The naysayers said Southside would never be a success because of the neighborhood's history. The naysayers fought the downtown ballpark. I could go on and on.

Ed Cone

EZM -- nobody is "getting $30 million taxpayer dollars." The money, ultimately, would come from bond buyers.

Tim, you repeat your earlier claim that the Proximity is near nothing but Friendly Center, but just as it was yesterday, the hotel (and its sister, the O. Henry) is located in a larger cluster of office buildings, which one presumes funnel a certain amount of business to the properties.

Downtown has businesses, too. It also has a large Marriott that can beat anyone in the market on price, and which already seems to have low occupancy rates.

I'm still in the info-gathering phase on this project, and I'm finding a high noise-to-signal ratio at both poles.

Andrew Brod

Thanks for the links, Tony. In that document a city official, John Shoffner, appears to treat the $30 million figure as though such a large issuance of these bonds is possible. Fec says it's not possible, which is consistent with my cursory reading of the state treasurer's letter. And yet I've gotta echo Tim and wonder what's missing. Shoffner's a smart guy and it'd surprise me if he'd toss that number around without any basis.

Stephen

Ed,

I don't think people taking advantage of the "Rendezvous" package at the Proximity are visiting Marty Orlowski next door - but a simple survey of the patrons at the Ruth's Chris bar would confirm your statement.

glenwoodobserver

Ed - as you research...how many employees in the business cluster near the Proximity AND O. Henry? How many downtown employees where we have a mediocre Marriott?

Fec

It also appears Bridget Chisholm was part of a $28M failed telecom deal in Memphis with public/private financing. She is not well regarded back home.

Details at my place.

Ed Cone

Stephen -- of course social business is a component of the market, but I think business travel is a vital element.

GO -- I'd love to get those numbers. FWIW, the two Quaintance hotels combined are not much bigger than the current model proposed for downtown, which itself is I believe smaller than the existing Marriott.

Fec

AB, the only thing I can figure is Guilford would surrender its 9.8M allocation to the deal.

Fec

But that can't be right because Brenda Jones Fox's letter says a notice of intent for four projects was submitted.

EZ Motorbikes

Tim,
Your knowledge of the history of Greensboro seems to fill a very short time line.

I for one, would like to know "Tim's" relationship to these proposed projects. Or is Tim simply another Action Greensboro Bobblehead kiss ass.

And to imply this will cost the taxpayers nothing? We've all heard that BS before. If this hotel is such a great deal for Greensboro then why can't the developers borrow the money from private lenders? Could it be because banks actually understand business and won't touch it?

As for the Ballpark-- never been filled.
As for Southside-- other neighborhoods go without their fair share of city services to keep Southside from reverting to a slum.

Please do go on and on...

Ed Cone

It's hard to argue that the ballpark -- which was built with private money -- has not been a big success. Ditto Southside.

Funding from private sources has been rather famously scarce of late. The city will be asked to replace its crappy parking garage with a better one, but other than that the cost to the local treasury is nil, as far as I can tell -- I wonder what the tax revenue from a successful project would be?

Spag

Andrew, I haven't "misused" the term. I used "quasi" for a reason but I realize that in all threads you have to find something to oppose me on. That also really helps a sober discussion of the issues as well.

I am amazed at the ignorance of microeconomics that are on display here from some (not you, Andrew, despite your pettiness I won't deny your credentials).

This comes down to one thing that has been oft repeated: If this makes good business sense, then the government does not need to underwrite it or pay for it in anyway.

Fec

My current theory is Marlon Phoenix got angry when he missed out on the Memphis bonds for his eponymous hotel and set about securing ours. They appear at this point, to be nothing more than rank amateurs.

Ed Cone

"If this makes good business sense, then the government does not need to underwrite it or pay for it in anyway."

Given the credit environment of late, this may not be true.

But in any case, if the government is in the bond business at the moment, it might make good business sense to use that low-cost money instead of seeking private sources.

Spag

Using someone else's money almost always makes business sense. That doesn't make it right, especially under our system of government. Using government bonds for private endeavors is a bad idea and only leads to more bad things once it becomes a wide spread practice. Witness the current financial crisis which may have not occurred without government financing/guarantees/idea that government would aid companies "too big to fail". The greater the divide between public and private, the better off we all are.

RecycleBill

Spag wrote: "The greater the divide between public and private, the better off we all are."

Exactly! It's called separation of church and state. The Church of Business, that is.

Andrew Brod

Fec, with regard to Guilford's bond allocation, the IRS document I linked to above says "the allocation is for the residual part of the county after excluding allocation for large municipalities." That sounds like Guilford couldn't offer up its $9.8 million for a project within Greensboro.

I've said I must be missing something. Perhaps it's the type of bond that can be used for this. Greensboro's allocation of Recovery Zone Facility Bonds is $19.1 million, but it also has an allocation of $12.7 million in Recovery Zone Economic Development Bonds. If the project is eligible for both types of bond, that'd get us to $30 million.

RecycleBill

Andrew wrote: "I've said I must be missing something. Perhaps it's the type of bond that can be used for this. Greensboro's allocation of Recovery Zone Facility Bonds is $19.1 million, but it also has an allocation of $12.7 million in Recovery Zone Economic Development Bonds. If the project is eligible for both types of bond, that'd get us to $30 million."

And maybe you're not missing anything. Perhaps the casino builders behind this scheme are simply bluffing, holding losing hands and hoping to use Bond PR to stay at the table long enough to the the City to ante up.

Or perhaps someone is attempting a bit of misappropriation of Federal Funds.

A note to Ed: There is no such thing as no cost to taxpayers when government bonds are of concern-- simply deferral of taxes to future generations. To imply there is no cost to taxpayers is selling us short.

Wonder where "Tim" went?

On another note: I've positioned my bulldozer (Cat D-7) very close to downtown-- where do they want the golf course for this new "destination hotel?" I'll grade it free of charge.

RecycleBill

PS. Running construction equipment is currently selling at scrap metal prices-- soon I'll have it all! (Followed by evil laugh.)

Fec

AB, that's gotta be the answer. Greensboro has already submitted $4M in econ dev bonds for the Ole Asheboro project.

Fec

If the submitted Ole Asheboro hotel needed $47M, why did the city only ask for $4M in econ dev bonds and leave the remaining $8.7M unallocated to revert back to the state for re-allocation potentially elsewhere?

Fec

Under no circumstance can econ dev bonds be used for private enterprise. That is the definition of facility bonds.

Tim

ez motorbikes in case you havent noticed this country went through a financial crisis recently. Banks aren't lending for much of anything these days. Of course that doesnt mean this hotel wont be a success just because it secures other types of financing.

In regards to Proximty and O'henry being near office buildings, you have to understand that those hotels are more successful because they are a luxury product unlike the downtown Marriott which is also located near a lot of office buildings. There is a difference between the Marriott and the Proximity. Quite frankly the downtown Marriott seems to be outdated and doesnt offer the ammenities you find at the Proximity or O'Henry. Even though they are both hotels, its like comparing apples to oranges. Now this proposed hotel will be a luxury hotel much like the Proximity and O'Henry. There is a market for this kind of hotel downtown. Again there are a number of factors that will make this hotel a success. For one there is a major transportation hub (Amtrak, bus station future high speed rail) located barely a block a way from the proposed hotel site, secondly the hotel project will include street level retail so it wont be just a hotel and will be more of a mixed-use development. Thirdly this will be a luxury hotel, and lastly it will be located in the epicentre of downtown Greensboro. It certainly is an incentive to be able to stay at a hotel and just walk to restaurants, bars, shops, lounges, nightclubs, museums and theaters. Because of the location and all these nearby amenities, the hotel will have advantages over other hotels in the city that are surrounded by big box reatailers ands strip shopping centers.

Stephen

"...For one there is a major transportation hub (Amtrak, bus station future high speed rail..."

Seriously? The people using this "major transportation hub" can barely afford a night at the Salvation Army, much less a $200/night hotel room.

bubba

"....future high speed rail...."

Yet another future boondoggle/debacle/fiasco/disaster/"business as usual" folly we need to fast track, I'm sure.

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