The New York City Capital Resource Corp. tomorrow will consider a Harlem hotel project to use the remainder of its recovery zone facility bond allocation.
ESmith Legacy Harlem LLC is seeking $19.7 million of tax-exempt bonds to partially finance a hotel at West 125th Street and Lenox Avenue. The would-be borrower is a still-unincorporated subsidiary of ESmith Legacy Inc., a Dallas-based real estate development and management firm named after Emmitt Smith, a former professional football player who co-founded the company and is its chief executive officer.
The developers plan to build a 10-to-12-story hotel above a four-story retail building that would be constructed and financed by another developer.
The hotel would have 175 to 200 rooms. Total cost of the project, including the $25 million retail portion, would be $80.6 million, according to the application.
Speaking at a CRC hearing Friday, Smith said building in Harlem was a unique opportunity. “We saw Harlem as a city the size of Atlanta that only had perhaps one name-brand hotel,” Smith said. “We believe in preserving the history of Harlem and bringing this unique product to this particular market.”
The retail project is being developed by partners John Sutton and Eliot Tawil. The two develop and acquire retail properties under the rubric Wharton Properties. ESmith Legacy would buy the air rights to build its hotel from Sutton and Tawil for $10 million, according to interviews and its application.
The retail portion, expected to contain 90,000 square feet of retail, would be privately financed.
ESmith Legacy is in talks with Hyatt Corp. to operate the hotel, ESmith Legacy chief operating officer Vernon Marrow said. Marrow said he was not prepared to discuss whether an underwriter had been chosen.
The lack of disclosure pertaining to wage information on the application raised questions for Good Jobs New York, a labor-oriented watchdog organization. Asked about the disclosure, New York City Comptroller John Liu said in a statement there should be a “consistent and standardized approval process for all projects.”
If approved tomorrow, the project will still require final approval before the bonds can be marketed.
The city was allocated $121.7 million of the tax-exempt private-activity bonds under the American Recovery and Reinvestment Act and has already allocated about $100 million to various projects. None of the CRC’s RZFBs have priced, even though they must be before the end of the year.
CRC chairman Seth Pinsky said difficult market conditions were responsible for the lack of sales and that the first deal would probably price within weeks.