Grand Hyatt Hotel in San Antonio could be put up for sale to pay off city-backed bond debt

0

The Grand Hyatt hotel next to San Antonio’s Henry B. Gonzalez Convention Center is up for sale — and there’s already a potential buyer.

Construction of the 1,000-room hotel began in 2005 using $200 million in revenue bonds backed by the City of San Antonio. Hyatt had made the necessary payments, but after failing during the pandemic, the city began to take over the payments. Now the Grand Hyatt can be sold to an out-of-state nonprofit to settle the debt.

The remaining revenue obligations from 2005 total approximately $168.3 million. The city contributed approximately $10.4 million in hotel occupancy tax revenue to support the payments. Hyatt owns the hotel and the city owns the land, which sits at the corner of Interstate 37 and Market Street.

City officials said Thursday that the Grand Hyatt essentially acts as a convention center hotel and is a selling point for conventions using the city for immediate access to its facilities.

“The grounds and hotel are significant assets given their proximity to our convention city and our Alamodome,” said Ben Gorzell, the city’s chief financial officer.

During the pandemic, Gorzell and City Manager Erik Walsh said Hyatt’s ground lease payments to the city began to accrue during the pandemic, leaving the city about $4.9 million accrued and unpaid.

Hyatt representatives were not immediately available Wednesday evening. Texas Public Radio has asked for comment.

Under the plan, Hyatt would sell the hotel to Tucson, Arizona-based Community Finance Corp. The city would issue another bond of up to $450 million to repay existing bond debt guaranteed by the city.

“He will also build operating reserves and debt reserves for the hotel in the future, he will pay the cost of issuance, and then he will finance through the nonprofit the acquisition of the Grand Hyatt from Hyatt and this will be how the nonprofit acquires ownership of the hotel.

Community Finance Corp markets itself as a not-for-profit corporation “existing for the purpose of relieving the burdens of government and erecting, financing the erection or maintaining any public buildings, monuments or works”, according to its website.

If the plan is approved, SWC would own the hotel and make bond payments over the next 40 years. Hyatt would continue to operate and manage the hotel for at least 30 years. The deposit would be refunded using hotel revenue and the city would not be responsible for compensating for any default.

Once the deposit is refunded, CFC would then transfer ownership of the hotel to the City of San Antonio. This could happen around the year 2060 or earlier if paid off earlier.

The decision is subject to the approval of the city council, which will consider this point on March 3.

This story will be updated.

Share.

Comments are closed.