Quote:
Originally Posted by ardecila
I mean, BMO Tower itself should be a pretty big profit generator. Isn't the whole point that the tower funds improvements to the station somehow?
I'm actually curious what the ownership structure of this tower is. Did Amtrak sell the land outright to Riverside, or is it a 99-year ground lease? Or is Amtrak somehow a full partner in the deal by contributing land in exchange for a % ownership of the improvements (aka the tower itself).
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I really don't know many details of the the development, what's stipulated in the PD and any other agreements with Amtrack and the city.
However, I'm cautious about assuming anything other than Riverside and Convexity underwriting the hotel phase of the development to be able to stand on its own (with of course whatever Amtrack/public/historic tax credits etc are planned to be part of the financing). In fact, I'd doubt the financing of the office tower and Union Station redevelopment itself will be linked in any way (other than very indirectly - if the tower is very successful, and further bolsters the developers' financial position/track record/reputation etc.....maybe it provides some benefit in terms of the financing terms they'll land for the hotel/station redevelopment). Could be wrong, but this is my guess about how they're approaching these projects.
One thing I would like to know is what are the obligations Riverside/Convexity have in terms of getting the hotel project done. Anyone know? I hope they are significant in terms of timing, penalties, etc. Extra important in a case like this project to put in place framework to dissuade a developer from getting the project who is really mainly just interested in one phase of the development, and for which it would not be a difficult decision to walk away from the other phase(s). Not asserting that is at all the case with Riverside/Convexity - but it's easy to envision such a scenario for projects like this, and public safeguards insisted by Amtrack, the city, etc to this effect are important.