For Immediate Release
October 30, 2009
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300 New Jobs Generated by First 'Boston Invests in Growth' Project
Mayor Thomas M. Menino today joined W Hotel officials and members of the Chinatown and Theater District communities to celebrate the opening of the hotel and residences, marking the occasion of the first major commercial development project to benefit from the City's Boston Invests in Growth initiative and the world-wide chain's first hotel in New England. In addition to the 250 jobs that were created during construction, the opening of the W Hotel enabled the addition of hundreds of permanent jobs to Boston's economy.
"With the help of our Boston Invests in Growth pool initiative, Boston does not have to wait a moment longer to have the world-class W Hotel open its doors, despite a difficult economy and slower credit market than we have seen in years," Mayor Menino said. "We're extremely pleased to welcome the W – and we know they will be a terrific addition to the surrounding neighborhoods and city as a whole."
The $243 million mixed-use project boasts 235 hotel rooms, 123 residential condominiums, 5,000 square feet of meeting space, a restaurant, retail space, and underground parking – among other amenities. The W's 'Descent bar' and signature 'Bliss Spa' will open in early 2010. The downtown development replaces a surface parking lot in the heart of the Theater District and is expected to increase the City's hotel tax revenue and increase Boston's tax base annually by $3 million.
Boston Invests in Growth, a loan pool made possible by U.S. Department of Housing and Urban Development (HUD) Section 108 funding, was first announced by Mayor Menino in a speech to the Greater Boston Chamber of Commerce last winter. The initiative provides mezzanine financing for those projects that have both permanent financing and equity already in place.
Last month, HUD approved additional Section 108 funds, bringing the loan pool's existing total to $69.7 million from the original $40 million that the City first announced was available. Mayor Menino noted that the City is actively accepting and reviewing Letters of Interest from potential Boston Invests projects.
Since early 2008, the financing of commercial real estate and smaller neighborhood-based development projects has become significantly more difficult, with banks and other lenders having tightened their underwriting standards. While banks and equity investors may cover about 90% of commercial real estate development costs, many large projects are often left to close the remaining 10% gap between first position debt and equity.
City officials said that there are currently a number of large commercial projects and smaller neighborhood projects in Boston that have all of their building permits and other approvals necessary to start construction, but have been delayed because of this last percentage gap in their financing.