Mandarin Oriental Hotel Group is expected to announce Thursday it has struck a deal to build a mixed-use luxury hotel and condo tower in Midtown Atlanta.
Tivoli and Mandarin Oriental’s intention to build a high-rise tower in the current lending environment comes as a surprising bright spot in a bleak economy. Details of the project’s financing could not immediately be confirmed, but if capital can be obtained for the project, it would defy severe odds, several hoteliers said.
“This is as brutal a financial market relative to getting debt and capital for projects as we’ve seen in a lifetime,” said one respected hotel industry source, who declined to identified.
Traditional lenders are strapped because of the credit crisis. One source said if Tivoli and Mandarin Oriental could tap into their own equity and cobble together financing from private equity funds or foreign capital, “then it can happen. That’s the only way it can happen.”
Landing Mandarin Oriental, world-renowned for its luxury reputation, would mark a major milestone for Atlanta’s hospitality community at a time when it is suffering through low occupancy rates and likely project delays due to the credit crunch, sources said.
Sources who declined to be named because they were not authorized to speak said Atlanta architecture firm Smallwood, Reynolds, Stewart, Stewart and Associates Inc. would design the project. Hardin Construction Co. is the leading candidate to be the builder.
Atlanta Business Chronicle first reported in March 2007 that Tivoli Properties planned to build a Mandarin Oriental hotel in Midtown. About the same time, Mandarin Oriental moved its development offices to Midtown.
The design of the high-rise tower will likely not be the same as the 700-foot illuminated onyx skyscraper depicted in a rendering obtained by the Chronicle last year, several sources have said.
It is also unclear how many rooms, condos and how much retail space will be included in the final design.
Talk of the project has quieted in recent months. Representatives with Tivoli and Mandarin Oriental declined to discuss the companies’ plans when contacted last month by a reporter, saying only that a Mandarin Oriental had never been confirmed for Atlanta.
Horst Schulze, a dean of Atlanta’s hotel industry, a founder of the acclaimed Ritz-Carlton brand and current president of West Paces Hotel Group, said if Tivoli can obtain financing, it is a major coup for the city.
“If it will happen or not is a big question and I certainly hope it will,” said Schulze, who is not involved in the project. Financing for hotels has dried up globally, he said and even companies that can self-finance are taking a wait and see approach.
Mandarin Oriental, he said, is a new brand that “everyone will benefit from.”
The stretch of Peachtree Street and neighboring avenues, Mendheim said, forms part of the centerpiece of the Midtown Mile, with elite shops, restaurants and hotels similar to Chicago’s Michigan Avenue.
“Our little corner of the world is here and it’s quite extraordinary,” Mendheim said.
Mandarin Oriental enters the picture when several established hotels, such as the Four Seasons Atlanta, and new luxury players will already be in the Midtown marketplace.
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