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Landmark's problems with
Bank trickle down to subsBond trustee holding $2.6 million for airport hotel Problems with the Chase Manhattan Bank have caused the Landmark Organization, which built the Hilton Hotel at Austin-Bergstrom International Airport, to stop making payments to subcontractors on that project. Landmark notified subcontractors by letter on April 19 that their payments had been delayed “due to the nonpayment by the lender of Landmark’s monthly progress billings” from January through April. The reason for the delayed payments is complicated by legal technicalities involved with bond financing for the hotel. The City of Austin created a not-for-profit corporation, Austin-Bergstrom Landhost Enterprises, Inc., to issue tax-exempt bonds. Proceeds from the bonds were used to finance the hotel’s conversion from an air base command center to an upscale hotel. Howard Falkenberg, a spokesman for the organization, said the Chase Manhattan Bank is trustee for the bondholders. The bondholders are repaid from revenues of the hotel. However, since the hotel had not opened by the time the first interest payments were due, it was necessary to make some payments from the construction account, Falkenberg said. As trustee, the bank was disbursing funds, which were used to pay both Landmark and its subcontractors. In addition, some of the funds were being used to pay interest to the bondholders, Falkenberg said. He said the trustee initially approved disbursing money from the construction account to pay interest, but then withdrew approval for the interest payments. At the same time, in late December, Chase decided to withhold money still due Landmark. “It finally got to the point that Landmark had to stop making payments to its subcontractors,” Falkenberg said. He said subcontractors knew that they could face this sort of delay because the contracts they signed with Landmark contained a clause stating that Landmark would pay when it received payments. At this point, the trustee is holding $2.6 million, Falkenberg said, which subcontractors will receive as soon as the trustee releases it to Landmark. Girard Kinney, an architect who worked on the project in its initial phase, told In Fact Daily that he had never had any problems with Landmark. Kinney said he planted the idea of turning the old Donut into a hotel with Mark Schultz, president of the organization. Falkenberg said Landmark and the bank have reached an agreement that would allow release of the funds. However, he said lawyers for the parties must agree on language for amending the agreement between the trustee and Landmark. “The lead bondholder has agreed to this amendment,” Falkenberg said. Even though the project was finished several months behind schedule—a factor in the current problem—it was completed within its budget of $30 million, he said. Landmark is also still waiting for the city to sell bonds to finance construction of the Convention Center Hotel. The current rumor is that the bonds will sell in about two weeks. Planning Commission mixes competing Plans for Hyde Park neighborhood, church Unanimous vote comes after hours' long hearing Planning Commission Chair Betty Baker sought a compromise on the divisive issue of the Hyde Park Neighborhood Conservation Combining District (NCCD) Tuesday night, crafting a motion she hoped would give something to the church while offering solace to the surrounding neighborhood.The Hyde Park Baptist Church (HPBC) had made two requests. The first was to be explicitly left out of the Hyde Park NCCD—a zoning overlay modifying the existing Land Development Code. The second was to add land to its own NCCD, which was created in 1990 to cover property the church owned at the time. The church has been acquiring property in a “growth corridor” to the south and west as outlined in a 1990 agreement, and had wanted that new land included in its own zoning overlay. The commission approved Baker’s motion to allow the church to add land to its NCCD, but also decided to include the church’s NCCD as a sub-district within the overall Hyde Park NCCD—with a condition. That condition was that the zoning regulations in place on the church’s property remain the same as they were in the church’s 1990 NCCD. The motions, on two separate agenda items, were approved unanimously ( Commissioner Ben Heimsath abstained. He did not attend the meeting since he lives in Hyde Park.). But the votes didn’t come without extensive discussion and confusion—both among members of the Commission and the parties on both sides of the argument. After the vote, attorney Richard Suttle, representing the HPBC, indicated both that the final decision could be open to some interpretation regarding the impact of the differing zoning overlays and that representatives of the church may not be entirely satisfied. Church leaders could be disappointed that the commission voted to leave property at 39th and Speedway out of the church’s NCCD sub-district, meaning that the tougher zoning regulations of the overall Hyde Park NCCD would apply to that lot. That property was recently bought by the church and is now the site of the Jacksonian Apartments. The other potential setback for the church came in the form of a prohibition of an aboveground parking structure on property in tract 6 of the NCCD along Duval Street. Residents of Hyde Park seemed somewhat more satisfied. “I’m really glad they’ll be holding that big tract (the Jacksonian Apartments) to neighborhood standards,” said Karen McGraw of the Hyde Park Neighborhood Planning Team. “They meddled with it a little bit, but I don’t think any of those were major things. What we don’t want is to have the church keep adding property that has real intense zoning.” The decision required extensive consultation with Neighborhood Planner Meghan Wieters and Assistant City Attorney Marty Terry, including a brief executive session. Baker said she was striving for fairness in the compromise measure. “It’s almost a denial (of the church’s request),” said Baker. “I think it’s an equitable solution.” After the vote, Baker quipped, “A miracle has happened.” The NCCD as approved by the Planning Commission includes six sub-districts, each with their own particular restrictions. It is bounded by Duval on the east, 45th St. on the north, Guadalupe on the west, and 38th St. on the south. The item now goes to the City Council, which could take it up in June or July. ©2001 In Fact News, Inc. All rights reserved. Montopolis plan postponed . . . The Planning Commission last night postponed a hearing on the Montopolis Neighborhood Plan to June 19. The neighborhood, which has strongly protested a proposed racetrack on a 100-acre swath of land, is hoping that the City Council will decide to purchase the property. Stuart Hersh of the Neighborhood Housing and Community Development Department, told In Fact Daily that about 40 acres of the property would be unusable for housing because of noise from ABIA. However, he said the land is currently zoned for single-family housing. The Planning Commission will consider the question of zoning on that site when the neighborhood plan returns . . . Firefighters reception . . . The Austin Firefighters Political Action Committee will host a reception to thank elected officials who have been supportive of firefighter issues at the Capitol Marriott from 5:30 to 7:30 p.m. today.
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