2016
01/31

Category:
Secured Financing

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New life for the Americus?

When the NIZ arrived in 2011, its powerful tax incentives seemed to provide an answer to the Americus funding problems. But some ANIZDA members dont trust Abdouches plan, arguing that his cost estimates for renovations are unrealistic.

After months of sparring with Abdouche, ANIZDA last fall struck a compromise with him. Theyd pay half the $10,000 cost of having an independent consultant assess how much it would take to reopen the 1927 hotel with a three-diamond rating, based on the hotel rating system by AAA Travel.

Of the roughly 60 hotels in the Lehigh Valley, only the Sands Casino Hotel in Bethlehem has a four-diamond rating, though the Renaissance in Allentown is expected to reach that when it is rated later this month. The rest are rated at three diamonds or fewer, according to AAA Travel spokeswoman Theresa Poduguski. Seventy-six percent are rated at three diamonds, she said.

If the independent assessment came in close to Abdouches estimate, he could proceed with NIZ tax money, provided he secured financing and a qualified hotel operator. If the estimate came in closer to the $25 million to $30 million some ANIZDA members expected, hed have to provide a performance bond and secure financing to match the estimate.

Bakers 118-page report, received by ANIZDA on Wednesday, states that the hotel can reach the three-diamond rating for $15.7 million. The estimate includes renovations on every floor, with more than $1.7 million of it going for finishings such as bathroom fixtures and counters, and another $1.6 million for furniture.

The biggest line item, at $2.4 million, is for a contingency fund to handle cost overruns. The estimates total, minus that contingency, virtually matches the $13.2 million Abdouche had estimated in the plan he first delivered to ANIZDA in 2013.

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