Luxury Hotel In Oregon Seeks Loan Help
The beautiful Nines luxury hotel in Portland, Oregon had the unfortunate timing to open just as the economic crisis began to take hold last fall. The resulting fallout means that this $141 million hotel is struggling to pay its bills (much like a couple of hotels in Scottsdale, Arizona).
The Oregonian reports that the Portland Development Commission agreed this week to accept delayed payments on taxpayer-funded loans to keep the developer from defaulting. The developer, Sage Hospitality Resources of Denver requested the delay with Ken Geist, Sage's executive vice president for development, telling the Portland Development Commission's board that the hotel could not have picked a worse opening date. The sudden and rapid drop in corporate travel spending deeply cut into the hotel's expected revenue. It is expected to generate less than half of what it was originally supposed to deliver in net operating income in its first year.
The 331-room hotel sits above a Macy's store (formerly the historic Meier & Frank department store) and is one of the most ambitious projects planned for the city's urban renewal. The developer is still planning to repay its $16.9 million in city loans at the original interest rates once The Nines' business improves. The current expectation is that loan payments should start up again in 2011 if the economy improves along the current predicted trajectory.
The hotel is offering a variety of special offers with rates starting at $129.