West Allis — The financing log jam that has held up a Hampton Inn & Suites hotel proposed for 82nd Street and Greenfield Avenue has given way.
John Stibal, West Allis development director, now sees "a clear path to the finish line" that will enable the hotel, a facility the city has longed hoped for and sought for the downtown area, to be built.
Assuming all remaining plans and details are worked out, the Hilton Hotel chain could conceivably open for business in 2015. Stibal said the money is already in the bank for the nearly $13 million hotel, which is expected to offer 104 rooms at about $110 per night and a banquet facility for 300.
But it wasn't easy getting to this point, mostly because of the nationality of the investors.
The 20 Chinese investors had to be cleared by federal Homeland Security, he explained. Through what's known as the EB-5 visa program, created by the Immigration Act of 1990, foreign investors can gain permanent residency in the U.S. if certain conditions are met, including investing enough money to generate at least 10 full-time jobs for U.S. workers.
Normally, Stibal said, the approval process would have taken six months, but because EB-5 financing has become increasingly popular for hotel financing, the time it takes to clear a backlog of foreign investment proposals has stretched out to one year.
Money in the bank
Money isn't the issue.
The Chinese investors are acting as a bank, Stibal explained. They will provide $10 million, the city will provide a $650,000 loan and equity partners will provide the balance of $2 million for a total $12,650,000 hotel development.
By July, money for the project should start flowing, with an initial $500,000 used to draw up detailed plans and specifications for the hotel, he said.
The hotel should generate about $320,000 per year in new property taxes, which the city can use to pay off its loan — an arrangement known as tax incremental financing.
The hotel also should generate an additional $140,000 in hotel room taxes, he said.
The hotel will be owned and operated by the same investors who own the Wilderness Resort in the Wisconsin Dells.
Stibal guessed that the city's Community Development Authority and the Wilderness owners would sign a purchase and sale agreement by the end of the year, close the deal in February, and allow year-long construction to begin construction in spring.
The hotel should generate about 80 full-time construction jobs, then is projected to support 30 to 40 full-time jobs and 30 to 40 part-time jobs.
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