Council Grants Extension to "The Hillsborough"
Today the Raleigh City Council agreed to write an extended contract for the 301 Hillsborough contract. The new contract will require financing by December 1, construction starts within 60 days.
David Reynolds spoke at the meeting and explained a current proposed arrangement he has with Regent Bank for a portion of the project. Regent wants to minimize exposure by requiring that any unsold residential units on the day of occupancy (and apparently the hotel portion) must be taken out by another financier. The Reynolds’ main obstacle has been that the hotel financiers do not want any residential component in their take-outs. So, the project is awaiting independent financial backing for the residential component; financing they feel will fall into place in the next 60 days.
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September 2nd, 2008 at 4:43 pm
Who would have guessed it, the City Council again ignores the recommendation of Russell Allen.
Can we have a “no-confidence” vote for him now?
September 2nd, 2008 at 8:02 pm
No confidence? If you haven’t noticed, the entire CMBS market has completely frozen. It actually says what a solid developer he is if he can actually get financing in this market… because no one else is.
Russell Allen needs a Finance 101 course because he is making reckless, knee jerk decisions that could leave this city in a far worse situation as developers wait out the this current environment.
People, we’re in a credit crisis. It is having nasty and drastic effects on the economy. This project, and other good ones such as this one, are a direct example of the spillover that has occurred. Just relax, as the credit markets work themselves out into next year, banks will be willing to loan once again and the building will resume.
September 2nd, 2008 at 8:03 pm
My bad Chris, I assumed you meant a no-confidence vote for Reynolds, not Allen….
I couldn’t agree more!
September 3rd, 2008 at 1:20 pm
I am a big supporter of The Hillsborough and the Reynoldses’ vision, but the problem most people have is the numerous extensions granted even during the times when lenders didn’t cause this type of crisis. I begin to wonder if there are indeed other developers interested in 301 Hillsborough, but it is up to Russell Allen to demonstrate this is the case.
In a way I am happy for this extension, but it’d better be the last one.
December 3rd, 2008 at 12:41 pm
[...] develop the Reynolds Tower, a mixed-use project planned for 301 and 309 Hillsborough Street. Since the last council meeting regarding the project, the developers have secured financing and commitment by Regions [...]