Hyatt Place
Bethlehem, PA

Acquisition Opportunity:

• Acquisition of a .70 acre parcel on the border of the historic district in the City of Bethlehem, owned by the Bethlehem Parking Authority.
• Property became available only after 16 months of negotiating on a competing piece fell through.
• Property is situated adjacent to a recently built 700 car city parking garage.
• Site is located within a LERTA district which provides a graduated tax abatement.
  

Development Strategy:

• Original plans called for a 21-story building with 9 floors of hotel and 12 floors of condominiums.
• After the condominium “crash” in the late summer of 2007, the project was completely redesigned for just a Hyatt Place Hotel.
• Acquired the franchise rights for the Hyatt Place in the Spring of 2007.
• Property takes advantage of the adjacent public parking garage and its advantageous parking rates.
• The property is situated on the border of the historic district which provides a significant room generator.
• Property also is strategically located between Lehigh and Moravian Colleges, as well as St. Luke’s Hospital.
• The Sands Corporation is constructing an $850 million casino and entertainment complex approximately ¾ of a mile to the south.
• The City of Bethlehem’s historic designations provide a very favorable barrier to entry for any future competitors.
  
  

Results Achieved:

• Ground breaking is scheduled for mid-June 2008.
• The City government has been extremely welcoming towards the project and its approvals.
• Development Budget is $17 million, the construction loan is $14.4 million, and the loan is being additionally supported by a partial loan guarantee by the State of Pennsylvania under its First Industries Loan support Program. An equity investor is providing the balance of the capital stack.

[back to Case Studies]