An executive with the developers of the proposed 201-foot Westin hotel/condo tower on Lower Broad downtown — Fayetteville, Ark. developer The Barber Group — said his company is not in trouble despite well publicized delays on two major projects in the company’s home state including work on another Westin.
The company has also scrapped plans for a controversial hotel-condo tower it planned to build in downtown Fayetteville, and last week said it had failed so far to secure adequate financing for the Nashville Westin project.
Brandon Rains, a project manager with Barber, confirmed the changes to the company’s projects in Arkansas, as reported in some Arkansas media outlets, but said that the company is not in financial trouble and that the decisions were made for the sake of better returns or in reaction to unexpected changes in the market.
The company, founded in 2004, is headed by 31-year-old CEO Brandon Barber.
“We’re involved in a lot of projects, but we’ve found ways to keep moving — we grew very fast, I’m not denying that by any means. We have a lot of projects going, but we are focusing on taking all of our projects from start to finish however we have to do that,” Rains said.
“In the [development] world, the market is much different and the conditions that surround that market are much different than they were two years ago, so things are harder to do. The cost of financing projects has increased, and that bears a burden on any project that you’re trying to do, and I don’t care if that’s a residential house or a $125 million hotel in Nashville. It’s more expensive these days, and those kinds of things make it harder for companies to weather the storm.”
Barber, earlier this month, confirmed that it has yet to secure financing and to acquire the property for the $125 million-plus tower it plans to build along the Lower Broad honkytonk strip but said progress is being made and that it still hopes to break ground on the hotel by year’s end.
Its development partner, the longer-established Sage Hospitality Resources of Denver, Co. — which will operate the hotel — said late last week that although the Nashville Westin project is still happening, construction on the project will probably not begin until the spring of 2009.
Michael Coolidge, an executive with Sage involved with the Nashville Westin, said he believes Barber is in no trouble.
“They’re a first-class organization — they’re a true pleasure to work with, and part of the issues they’ve had in northwest Arkansas have just been because of the market within northwest Arkansas and some of the pullbacks that they’ve just seen there. But, overall, we’re confident with them as our partner and moving forward with them in Nashville with no question,” Coolidge said.
He said design work and pricing exercises for the Westin have proceeded smoothly, that pre-sales of the condos will likely begin in February 2008 and construction in the spring of 2009.
“We really just feel that the delay that we encountered to get it entitled and approved [by Metro] is still impacting the project a little bit,” Coolidge said.
The proposed Westin, which would sit between Second and Third Avenues, drew the ire of local preservationists for months before the Metro Council approved it last March, saying the height of the building would denigrate the historical integrity of Lower Broad. A coalition of downtown business owners fought in favor of the project, which they said would bring an influx of new tourism dollars downtown.
Barber and Sage will restore the historic Trail West building that will sit under the hotel as part of the redevelopment. The company will also develop the building according to environmentally friendly LEED standards and plant a green roof over much of it at the request of the Metro Council.
The price of the Nashville Westin, Rains said, has risen from the $125 million estimated last spring, although he said the company still has yet to determine the final cost.
Barber recently decided against building the $70 million “Divinity Project” hotel-condo tower in Fayetteville, Ark. — a building that, like the Nashville Westin, was opposed by some locals because of its height and out of concern it would not mesh aesthetically with the downtown — in reaction to a lawsuit filed against the city that has prevented Barber from beginning construction of the hotel.
Rains said that, because of the lawsuit, the company had no idea when it could begin construction of the hotel, which sits on property for which Barber is paying interest.
“We couldn’t carry on in that manner without knowing for sure what was going to happen to the project. So we withdrew our plans, and we’re reevaluating the highest and best use for that site,” Rains said.
The company has delayed construction of a 266-room Westin hotel it still intends to build in Rogers, Ark., but Rains said this is simply because it decided to change the hotel’s location. Barber first intended to build the hotel adjacent to a shopping mall, but an opportunity arose to partner with another developer to build the hotel, instead, on a site in Rogers nearby a planned new convention center and a new building that will be operated by the World Trade Centers Association. It is a move, Rains said, that made better fiscal sense.
Barber has also slowed work on an approximately 25-acre mixed-use development in Fayetteville, called the Bellafont, having sold a portion of the property to another developer, who intends to build an office tower. Barber had planned to open the first Bellafont building, for a retail tenant, this past spring but opened it a couple months later. Rains said the remainder of the retail portion of the project should be completed by year’s end.
About the Nashville Westin, Rains said it is unreasonable to think anyone could move quicker on it than Barber.
“For anybody that thinks they can come in and make this project happen quicker than us is not likely. To understand how complicated the historic renovation is, LEED certification, the green roofs, affordable housing and the dollars that all of those components add to the project, along with how small the site is, the need for parking, where we’re going to stage materials — this is a complicated project.”