Stratus Properties announced that it closed financing for the massive $295 million Block 21 hotel-retail-condo project behind City Hall on Friday. Not wasting anytime, they plan to begin construction on the 36-story project on Monday.
No project has been subject to more speculation than the W Hotel & Residences. Over the last few months, rumors have swarmed that the project might not materialize. Despite strong pre-sales, it seemed that the large project might not be able to raise the financing required to break ground.
However, the developers have pulled it off. With groundbreaking in site, the Block 21 project will likely become the heart of downtown. Located on 2nd street directly behind City Hall, Block 21 fills an important street-front retail gap between the two AMLI projects. As Seaholm and the redeveloped Green Water Plant grow to become a vibrant corridor between Congress and Lamar just North of Ladybird Lake, the 2nd street district and Block 21 will be in the center of the action.
Once the W Hotel is completed in 2010 and the Condos completed in 2011, the project will also contain the 2,480-capacity venue for “Austin City Limits” as well as other restaurants, bars, and retail.
Owners of W Austin Residences will have full use of all the hotel’s facilities as well as access to 24-hour room service, daily housekeeping service and concierge services, and a spa in the building. Whatever, Whenever service provides the closets thing to a personal butler: call them to shop for groceries, take a dog for a walk, fix a flat tire, of pick-up take out on your behalf.
With today’s announcement, additional project details were revealed:
– The project will include 165 units, down from the originally planned 196 units. The change is reported to be the result of the combination of some units into larger condos.
– Just more than half, 85 of the 165 units, are under contract with nonrefundable 10% deposits.
– The average price of sold units is an amazingly high $1.1 million with prices ranging from the high $400,000s to more than $3 million.
– The project will have a significant economic impact, creating more than 1,000 jobs during construction and hundreds of new jobs when the project opens. The project is expected to provide the City with approximately $35 million in incremental taxes once it opens.
– It will take 30 months to build the hotel, for an expected fall 2010 completion, and 36 months for the last condominium to be finished, by about May 2011.
Here is a summary from the Statesman:
With financing in place, construction is finally ready to begin Monday on a high-profile downtown development with a 36-story W hotel, condominiums and a new “Austin City Limits” venue.Joint-venture partner Stratus Properties Inc. closed Friday on financing for its Block 21 project, which will cost $295 million, up from an earlier estimate of $260 million.The higher costs are related to 70,000 square feet being added to the original project and a “modest increase” in building costs, Stratus chairman and CEO Beau Armstrong said.The financing paves the way for crews to arrive Monday to start excavation work for three levels of underground parking, Armstrong said. The entire project is expected to be completed in three years. . .But Armstrong said the “sheer magnitude of the project” and a highly challenging lending market altered the timetable. The city had the right to repurchase the property if Stratus didn’t start construction by April 15 but gave Stratus an extension, he said.”It’s a tough time to borrow money now, no matter who you are,” Armstrong said. And though, typically, construction loans aren’t the hardest part of a deal to land, “because of the turmoil in the credit markets, it became a more difficult proposition,” he said.Armstrong said that it also took time to get the necessary building and other permits from the city but that those are now in hand.