LaGrange Town Square Hotel

Developer: LaGrange Hospitality Partners

Type of Development: Real Estate/Hotel

Owner: LaGrange Hospitality Partners

Cty and State: LaGrange, GA

Contact Person: Ed Briscoe/Weave Social Finance

Phone: 720.394.2820

Contact Email: [email protected]

Allocation Amount Requested: $21,000,000

Brief Description of Development:

Project Summary A public/private partnership amongst the City of LaGrange, Georgia (the  City ), the Downtown Development Authority of the City of LaGrange ( the  Authority ), the Calloway Foundation, a not-for-profit corporation established under the laws of the State of Georgia (the  Foundation ) and Lafayette Square Hospitality Partners, LLC, a Georgia limited liability company (the  Developer ) is seeking New Markets Tax Credits to fill the final gap in financing needed to develop a Courtyard by Marriott brand hotel (the  Hotel ) on Main Street in the historic district of downtown LaGrange, Georgia.  All of the other financing sources have been secured and the project will not move forward without NMTC financing.  The town is re creating itself from a textile center to a new and emerging economy of Fortune 400 Companies, which includes the construction of a new billion-dollar, state-of-the-art automotive plant capable of producing 300,000 plus cars per year.  Georgia Tech s economic impa  ct study
  indicates this emerging economy will generate 20,000 new jobs over the next few years, making LaGrange and Troup County a significant source of new jobs.  This project is seeking to bring the benefits of this growth to the heart of the town to revitalize local businesses and maintain its unique character.  Business travelers will bring a significant economic boost to the city while providing a unique experience for local business partners.
  
In July of 2011, a public/private relationship was created and a Memorandum of Understanding (MOU) was created that outlined each Stakeholder s responsibility in the venture.  When completed, the Hotel will be the only hotel in the Historic District and the only Marriott product in LaGrange, Georgia.  The Hotel will have 97 guest rooms, and hotel parking will be in a newly constructed public parking garage contiguous to the Hotel.  It will be in relatively close proximity to West Georgia Medical Center and LaGrange College; approximately 11 miles from the Kia automotive production plant; as well as near Callaway Gardens and other local and regional attractions.  The hotel will be the  centerpiece  of the City with walkability to 11 restaurants, a 10 screen, state-of-the-art cinema, retail shops and the new government administration building.  
 
Economic Impact
The project is located in census tract 13285960400, which is a targeted-distressed, non-metropolitan census tract.  The City estimates the economic benefits generated by hotel lodging and to the local restaurant community alone at approximately $6.5M annually.  Increasing the population of shoppers on Main Street every night will also energize and help sustain the economic viability of the downtown area and create a socially robust environment.  The Hotel will create over one hundred construction jobs over a 14-month period and over 30 direct, permanent hospitality- industry jobs.  It will allow the City to attract more conferences and conventions to the downtown community.  Attendees would then circulate their dollars throughout downtown business through the purchase of goods, services, and amenities.  This Hotel is economically and socially critical to the long term and sustainable success of the redevelopment of the downtown and Historic District.
 
NMTC Projected Sources and Uses
As a public private partnership, this project requires multiple sources of revenue including financing support from the city, a large grant from a local foundation, a loan from a local credit unions, and sponsor equity.  The following are projected project sources and uses assuming $21 million in NMTC allocation (assuming approximately $0.80 per credit):
 
Sources
Sponsor Equity                  $1,500,000
Grant Funds                       $4,000,000
City Funding                       $3,400,000
Bank Loan                           $6,500,000
NMTC Equity                      $5,666,000 
Total                             $21,066,000
 
Uses                     
Land                              $1,800,000
Hotel Hard Costs       $12,389,000
Soft Costs & Fees             $2,227,000
Parking Garage                 $4,000,000
Contingency                         $650,000 
Total                             $21,066,000
 
Transaction Structure
The City of LaGrange has sought to create a hotel project on the downtown square since 2007, awaiting the right time in the market and for the financing pieces to come together.  As evidenced by the multiple sources of capital necessary to create this partnership, the hotel project requires NMTC subsidy to complete the financing gap for the project.  Hotels in the area have traditionally targeted locations along the interstate.  This unique effort to target business travelers and bring them to the historic heart of the town is not the typical business plan for a hotel in a rural area.
 
The local bank, the city, and the foundation have maximized their support of the project.  NMTC subsidy is needed to provide the necessary equity alongside the developer to complete the project and ensure its long term success.
 
In summary, all other forms of financing are lined up, and NMTC funding is the final critical piece of financing necessary to fund the construction of the project and support its long term viability and impact on the community.

But-For Statement:

The City of LaGrange has sought to create a hotel project on the downtown square since 2007, awaiting the right time in the market and for the financing pieces to come together.  As evidenced by the multiple sources of capital necessary to create this partnership, the hotel project requires NMTC subsidy to complete the financing gap for the project.  Hotels in the area have traditionally targeted locations along the interstate.  This unique effort to target business travelers and bring them to the historic heart of the town is not the typical business plan for a hotel in a rural area.
 
The local bank, the city, and the foundation have maximized their support of the project.  NMTC subsidy is needed to provide the necessary equity alongside the developer to complete the project and ensure its long term success.
 
In summary, all other forms of financing are lined up, and NMTC funding is the final critical piece of financing necessary to fund the construction of the project and support its long term viability and impact on the community.

 

 


 

 

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