George Smith Partners (GSP) has arranged $32.4 million in financing for the ground-up development of a 250-room, 35-acre, casitas-style resort hotel flagged by an IHG Hotel Indigo in Coachella, California on behalf of the developer, Glenroy Coachella. The hotel will be the closest hotel to the Empire Polo Club, the site of many famous music festivals held annually. It is also located to capture business from regional tennis, golf, film, and other corporate events.
The hotel’s architecture is designed for entertainment-based events. The property includes a 13,000-square-foot convention center; 10,000-square-foot saltwater pool with a summer cooling system and a DJ booth/catwalk; an 11-acre “playground” to host music-related events, wellness retreats, and corporate/private events; and 250 guestrooms with private entrances and en suite bathrooms.
Many of the guestrooms are located in two-, four-, and six-bedroom casitas with living rooms and social areas for entertaining options. The hotel also provides a restaurant, spa, gym, and yoga/pilates studio.
Steve Bram, principal/co-founder of GSP, worked with SVP David R. Pascale, Jr. and assistant VP Huber Bongolan, Jr. to arrange a $24.4 million senior construction loan and $8 million PACE funding for the hotel — the first new construction hotel project ever financed by PACE in California. “The Hotel Indigo brand perfectly positions the hotel within the ‘cool’ segment of the market,” Bram says.
He adds, “In today’s lending environment, hotel construction is a challenge to finance. But with our deep relationships, we found a lender who was excited about the concept. The PACE financing was then added to complete the total capital stack.”
The PACE equity, essentially an energy loan, finances the energy-efficient HVAC, lighting, windows, water systems, and seismic strengthening.
In addition to the dual capital sources, Bram notes that the City of Coachella enthusiastically supported the project by providing a $25 million tax abatement and approving Mello Roos bond financing for the infrastructure.
“By communicating the sponsor’s proven track record of developing and operating hotels, as well as their strong connections to A-list performers and music labels available for future concert performances, we were successful in proving the sponsor’s unique ability to make this resort a ‘go to’ destination during the area’s many music festivals,” Bram says.