DALLAS --The Port of Greater Cincinnati Development Authority is planning a post-July 4, $57 million bond offering that will be used to finance the construction of a 239 room upper upscale hotel and conference center at the Madison Center development, 7 miles from downtown Cincinnati.
The authority's taxable special obligation lease revenue bonds series 2016A are set to price on July 6.
In addition to the lease revenue bonds, approximately $15 million of special obligation development tax increment financing revenue bonds will be issued to finance the public infrastructure – such as roadways, parking improvements, and walkways – at the site.
The lease revenue bonds are secured by the cash flows from the hotel and a mortgage on the hotel property. "Bondholders will also benefit from a lease guaranty that is secured by an assignment of rents and a mortgage on the headquarter office property," said Richard Hatton, managing director at Hilltop Securities.
Hilltop Securities is the underwriter. Frost, Brown, Todd LLC is bond counsel.
Hatton said that the bonds won't be rated by any of the big three credit rating agencies; however "they may be eligible for internal ratings by investors as mortgage obligations." Mortgage loans are typically non-rated, but insurance companies and other investors can assign their own internal ratings.
The conference center hotel is part of phase two of the Madison Center development that is located along I-71 within the City of Cincinnati and has an estimated project cost of approximately $70 million.
The project is a redevelopment of the former NuTone warehouse site and will convert an existing parking garage into a 239-room, 426,000-square-foot, full-service boutique hotel and conference center. The nine-story building will also feature state-of-the-art meeting spaces, 16 contemporary event spaces, rooftop garden, outdoor dining area, and a restaurant/lounge.
Upper-upscale hotels fall between upscale and luxury in terms of room pricing and amenities. The hotel operator has been announced as Dolce Hotels & Resorts, an arm of the Wyndham Hotel Group. It will be the first Dolce hotel in Ohio.
The sponsor of the development is RBM Development, which is owned by August Troendle, the founder and CEO of Medpace Inc., a global clinical research organization.
Medpace relocated its global headquarters from Norwood, Ohio to the Madison Center site in 2008. In 2014 it won approval from the Cincinnati City Council for a $126 million public-private redevelopment of the remaining 8 acres of Madison center, to include, besides the hotel, two office buildings totaling 160,000 square feet, 75,000 square feet of retail space and a public plaza.
Construction on the hotel is scheduled to begin in June 2016 and is slated for completion in December 2017.
