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Hyatt hotel facing financing challenges



It will still likely fly the Hyatt flag but the timeline for construction of the 400-room luxury hotel adjacent to the Whistler Racquet and Golf Resort has again been pushed back due to global hotel financing challenges.

"It’s going a little slower than anticipated," said project director Francis Wong. The goal now is to commence construction in the spring of 2001, for completion in the fall of 2003.

Developers, Park Georgia, announced with fanfare that the Hyatt would be partner and operator of the hotel in 1997 and the goal then was to start construction on the $100-million plus project in the spring of 1998.

The construction start date was pushed back to the spring of 2000 and then to the fall of 2000 because of difficulties in tying up a financing package. Now Park Georgia is saying the full service, five-star luxury hotel will likely be operated by Hyatt.

This, said Wong, is to keep options open.

"We are in a very difficult hotel financing market at the moment," he said. "And, it is not just Whistler. Whether it’s Vancouver or San Francisco or Honolulu, hotel financing is currently difficult all over the world. All of us are competing for the same pot of funds," noted Wong.

"A person looking for investment returns may feel that, for the same returns, he can do a better job in San Francisco and take less risk. More importantly, he can buy a finished hotel rather than one still to be constructed. People would rather buy an existing hotel," said Wong.

"It’s a very competitive capital market with a very finite amount of development dollars so it is a long and difficult process, whether in Whistler or elsewhere."

The original plan was also to have one owner for the full-service hotel instead of a stratified property, like the Westin, where each room has a different owner. This presents its own financing challenges and Wong said the plan now may include stratifying a portion of the project. "We are now looking at a variety of options that could include common ownership as well as some strata."

As for the Hyatt flag, Wong said a lender will have a lot to say about the finical decision in who manages the property. "And nobody wants to put words in Hyatt’s mouth and say, yes, there will definitely be a Hyatt, until all the Ts are crossed and the Is dotted," noted Wong.

"With the financing environment we are in, you have sort of got to keep your options open."

Wong said traditional sources of hotel financing would have come from Asia five to 10 years ago. More recently, financing has been sourced from pension funds and private investors and Wall Street has been keen to get in on the hotel industry expansion.

He said he is optimistic the new construction timeline will be met.

The delay in building means the nine-storey Hyatt will now be opening doors after Intrawest’s nine-storey Four Seasons project, which is slated to come on line on Lot E in front of the Chateau Whistler in 2002.

Construction on the 243-suite Four Seasons is expected to begin in the spring of 2001 with a planned December 2002 opening.

The Four Seasons will include a full spa, health club, outdoor pool and 10,000 square feet of meeting and banquet rooms. It will be within walking distance of the Wizard Express lift at the base of Blackcomb. The property will use the 590 bed units acquired by Intrawest in the Whistler Mountain merger.

The Four Seasons Resort Whistler will be the first Four Seasons property to be stratified and sold to individuals as condominiums and then managed by the Four Seasons as a full-service, luxury hotel.

The Hyatt will also include a spa plus 25,000 square feet of meeting and convention space.

Also set to come on stream in the near future is Intrawest’s 120-unit First Tracks Lodge. Part of the Creekside redevelopment, First Tracks will be a high-end concrete development with large units. The goal is to start construction on the First Tracks project in the spring of 2001 for a 2002 fall occupancy.

The Legends building, which rose from the Creekside base area during the summer, will have about 121 units available for occupancy next spring. Those strata-titled units have been sold out under a quarter share system, with an option to put the rooms in a rental pool when not in use.

Intrawest will also be building a second hotel near the Chateau Whistler on Lot 5 with the 476 bed units acquired through the Emerald Forest deal. Doug Ogilvy, vice-president of the Intrawest Resort Development Group, has said construction on that hotel will likely commence in the spring of 2003.

He said the construction schedules will obviously be subject to market conditions and municipal approvals.