DALLAS - Irving, Texas, has chosen Westin Hotels & Resorts to operate a planned $90 million hotel serving a new convention and entertainment center, officials said.
Mortenson Development Inc. expects to break ground on the hotel this year, with completion expected in 2015.
Financing for the hotel will include $17 million of bonds backed by hotel tax revenues under a city agreement with Mortenson. The bonds will be offered through a conduit issuer and will not carry the city's triple-A rating.
Standard & Poor's revised its outlook to stable from negative and affirmed its AAA rating on Irving's general obligation debt on Jan. 21, citing changes in the city's debt issuance plan.
The new policies and plan "have reduced our previous concerns about more-aggressive borrowing that could have weakened the city's debt profile," said S&P analyst Russell Bryce.
On Jan. 28, Irving priced $39.7 million of hotel occupancy tax revenue bonds for an entertainment center adjoining the city's convention center that opened in the Las Colinas area in 2011.
The bonds, rated BBB-plus by S&P, drew yields of 5.35% on 5% coupons maturing in 2043.
In addition to the conduit bonds, the private hotel financing will include a $55 million of senior loan and $16 million of private equity, according to the plan approved by the city council.
The city will own the land, while the developer will own and operate the hotel, according to the agreement.
The $300 million entertainment center, to be known as the Irving Music Factory, will be built through a public-private finance agreement with the ARK Group, a Charlotte, N.C., developer owned by Noah and Rick Lazes. ARK built a similar project in Charlotte.
