MINNEAPOLIS—Plenty of properties in the United States development pipeline sit in the “final planning stage” for months—or even years. They’re “shovel ready,” and developers are making last-ditch efforts to solidify financing.
Lately, bringing the brand on board as a partner is a popular trend to secure much-needed equity. The Radisson Blu Hotel Mall of America, a project under construction in Bloomington, Minnesota, is an example of the right kind of partnership that needs to take place to get a property out of the ground.
Carlson Rezidor Hotel Group and Mortenson, a U.S.-based privately-held construction services and development company, are on track to open the $137.5-million Radisson in March 2013. Carlson and Mortenson are partners in developing the hotel; Mortenson is the developer and general contractor and Carlson will manage hotel operations.
“We will be opening by the first of March (2013). It’s better than on track. We had a very mild winter and obviously that helped a lot,” said Christer Larsson, Carlson’s VP of food and beverage in the Americas, who recently provided HotelNewsNow.com with a hard-hat tour of the under-construction property (see video).
The hotel’s financing comes from multiple sources, including Recovery Zone Facility bonds, mortgage-secured notes, general obligation bonds from the city of Bloomington, a Mall of America skywalk contribution and developer equity.
The RZF bonds are tax-exempt private activity bonds created by the American Recovery and Reinvestment Act passed by Congress in February 2009. The mortgage secured notes are held by trade pension funds and community banks.
“To secure financing for a transaction of this size and complexity is very gratifying,” said Jerry Tabolich, executive VP of Dougherty Funding, in a statement. Dougherty Funding is the Master Disbursing Agent for all project funds; Dougherty & Company arranged and placed the mortgage-secured notes and RZF bonds for the project. “There are a lot of people and agencies behind the scenes that helped make this happen. It’s the culmination of a lot of hard work and coordination.”
The upper-upscale Radisson Blu Mall of America will be the second Radisson Blu in North America and aligns with Carlson Rezidor’s plans to expand Radisson as a contemporary and globally consistent brand in key cities.
It will be the first hotel connected by skyway to the mall and will feature three room styles: ‘Urban,’ ‘Naturally Cool’ or ‘Mansion House.’ The FireLake, Grill House & Cocktail Bar is a mix of classic American heartland flavors.
“This is a very populated area; it is a great business location,” Larsson said. “The Mall of America has enormous pull, and this is the center of the Carlson Hotel Group, so we wanted to be in this location.”
The Mall of America is the largest indoor entertainment and shopping mall in the U.S. It’s a short drive from the state capital in downtown St. Paul, minutes away from the Minneapolis-St. Paul International airport and downtown Minneapolis via the Metro Transit Light Rail commuter system.
To take advantage of those unique demand drivers, Radisson Blu Mall of America will offer plenty of meetings and events space. The hotel will have more than 26,300 square feet of space with flexible seating accommodations, and it will feature two ballrooms and six meeting rooms.
Harry Gorstayn was named GM of hotel in late April. Gorstayn previously worked with Four Seasons Hotels & Resorts for 24 years, including as manager at the Four Seasons Beverly Wilshire in California.
In addition, Gorstayn was previously a GM in Philadelphia and Palm Beach, Florida; executive assistant manager at the Four Seasons in Seattle; and director of F&B at the Four Seasons Chicago. Before joining Four Seasons in 1988, he was director of F&B at Le Parker Meridien in New York.
The Radisson Blu Mall of America follows Radisson Blu’s successful entry into the U.S., with the first property opening in November 2011, occupying the first 18 floors of the 82-story Aqua tower in Chicago.
“We had very, very positive feedback from Chicago,” Larsson said. “It’s a new style of hotel, and it’s quite modern and contemporary looking.”