Sage Hospitality offers debt deal on historic Oregon hotel
Cathy Cheney | Portland Business Journal
The Portland Development Commission is considering accepting an $11.5 million offer to satisfy the $18.2 million it is owned on four low-interest loans it made to construct The Nines at the former Meier & Frank building in downtown Portland.
Denver's Sage Hospitality[5] has proposed a discounted loan-payoff deal for The Nines, a hotel it redeveloped and manages in a historic Portland, Ore., building -- an offer that would mean a $6.7 million debt writedown for the hotel's public-agency lender.
The Portland Development Commission[6], the city’s economic development agency, is considering accepting an $11.5 million offer by a Sage affiliate to repay the $18.2 million balance on four loans it took out from the PDC when it converted the upper floors of the former Macy’s/Meier & Frank department store in downtown Portland into an 331-room luxury hotel. The Nines is the fifth-largest hotel in Portland.
Sage manages the hotel, and also owns a condominium interest in the hotel portion of the building through a limited liability company. Its four PDC loans are currently slated to be paid off between 2015 and 2031.
> RELATED: Sage Hospitality buys 11 hotels with 3 in Colorado[7]
But Sage approached the PDC about repaying the debt at a discounted rate. The company wants to drop its ownership stake and focus solely on managing the hotel after 2015, when tax credits that helped to finance the project expire.
In the year leading up to that, Sage and its partners would turn control of the property over to an undisclosed publicly-traded company, with Sage continuing as the manager.
Sage has essentially not paid off any of the PDC debt, though the agency said the Denver company is not in default because its loan terms allow it to miss payments if the hotel doesn’t generate enough revenue. That apparently has been the case since it opened in 2008.
Wendy Culverwell covers real estate, retail and hospitality.
References
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- ^ Sage Hospitality (www.bizjournals.com)
- ^ The Portland Development Commission (www.bizjournals.com)
- ^ Sage Hospitality buys 11 hotels with 3 in Colorado (www.bizjournals.com)