$23M financing package awarded to developers of Hotel Lancaster
Lancaster developers John Meeder and Sam Wilsker, along with a group of investors, recently closed on a $23 million financing package to convert The Hotel Lancaster, formerly the Brunswick Hotel, into a Holiday Inn Resort.
Expected to open as early as next June, the remodeled hotel in downtown Lancaster will accommodate 86 new guest rooms, along with a full-service restaurant and banquet facilities. The facility is expected to create 66 new jobs and retain 36 jobs.
Community First Fund organized the lending group and provided a $4.85 million permanent loan for the project.
The hotel will continue to operate throughout construction, said Mary Kay Eckenrode, Community First Fund’s director of real estate lending.
Based in Lancaster, Community First Fund is a nonprofit organization that provides capital to businesses, real estate developers and community support organization in low-income communities of central and eastern Pennsylvania.
The hotel currently uses 132 rooms. The 86 rooms being renovated have not been used for more than 10 years. After those rooms are renovated, they will be open to guests while the 132 rooms currently in use will close for renovations, said president and CEO of Community First Fund Daniel Betancourt.
Of the $23 million in loans, $6 million will be used to refinance a current loan on the building. The remaining $17 million will go toward renovations, Eckenrode said.
Leading the financing is PeoplesBank which committed a $12.3 million permanent loan to the project.
The Lancaster County Economic Development Company was also a major player in the project, forwarding a $6.25 million Building PA loan that it received from the Pennsylvania Department of Community and Economic Development.
Other participants include: Commonwealth Cornerstone Group in Harrisburg, a nonprofit run by the Pennsylvania Housing Finance Agency; and Bridgeway Capital, a community development financial institution based in Pittsburgh.
Lancaster’s City Revitalization and Improvement Zone previously approved the hotel project to receive the benefits of a state tax incentive. The improvement zone allows the majority of state taxes generated by the Holiday Inn to be used for debt service to repay the loan from Community First.
Community First Fund has played a significant role in another major development project currently underway in downtown Lancaster. It awarded an $8 million New Markets Tax Credit allocation for the renovation of the former Bulova building at 101 North Queen Street into the 101 NQ mixed-use complex.
"The transformation of the hotel, coupled with the 101 NQ project at the other end of the block, will complete the revitalization of the entire Lancaster Square. Queen Street, from Orange Street to Chestnut Street, will be a vibrant hub of retail and office spaces, apartment units and a resort hotel. These are businesses that will provide jobs and improve the quality of life for those that live and work in the city," Betancourt said.