Economy wilts plans for $40 million Upper Saucon resort

1. Sand Hotel which will have meeting space and this project with hotel with Convetion Center can not both occur, especially if Lehigh Valley Convention Center which is to cost $700m and be financed via Commonwealth of Pennsylvania is eventually built near Sands and Lehigh Valley Arena.

2. This site can support another hotel which caters to golf. In fact, if this group was smart they would team up with Sands for overflow and have Sands co-develop it with comps of Golfing at Center Valley Club.

Don Stabler's dream of a built out complex at NJ Zinc is still at its infancy 30 years later. Just goes to show how slowly the Lehigh Valley has grown with respect to OFFICE jobs. Just wharehouse after wharehouse has been driver of local economy for past 20 years.

Does the Lehigh Valley really need another hotel?? I mean really...
There is not enough market share for the existing hotels.

It depends what type of hotel. A hotel with a spa services next to a golf course, office complex and shopping is viable. It is also proximate by 5 miles to what eventually will become largest entertainment complex outside of Philadelphia in the Commonwealth.

Sayre Mansion Inn, Comfort Suites and Hotel Bethlehem have been sold out every weekend since Sands opened and it looks now they are sold out on weekends through September. The ADR is now over $160.

Given this circumstances, if it is priced in the $150 to $200 range per night on weekends, YES, this hotel would have been viable.

I guess that is the rub. To build out to that quality level to demand $200 per night, you are looking at $200,000 per room for constuction and furnishings. You will need a minimum of 200 room hotel. This at a minimum is a $40 million project, probably more like $60 million.

This as article says is beyond the pockets of these developers hence they need a money partner and those are still hard to find for some developers. In a $60 million deal, you will need 30% equity or $18 million and the other $42 million will have to be debt financed.

Locally, Bear Stearns Commercial Mortgage, Lehman and UBS Column Financial mortgage services were big players in CMO market. 2 of the 3 are out of business and the others have slowed down their loan pools, hence it is really difficult for small scale developers who don't have deep pockets to find debt financing. Then the small or regional banks also have scaled down their commerical real estate loan activities.

The reason that the development is still in it's infancy is because the area is notorious for sinkholes. This is why the golf course was put there in the first place. Since for several years,nobody wanted to put buildings up for this reason, they had to put something there that would not suffer too much damage from sinkholes. Wait until you see the promenade sink into the ground, it will be a replay of corporate plaza back in 1994. Mark my words.

Funny how the developers have such a short term memory.

I hope the whole deal sinks. This is not in our best interests. We won't be the clientele. Fight it.

Skippy wrote:

The reason that the development is still in it's infancy is because the area is notorious for sinkholes. This is why the golf course was put there in the first place. Since for several years,nobody wanted to put buildings up for this reason, they had to put something there that would not suffer too much damage from sinkholes. Wait until you see the promenade sink into the ground, it will be a replay of corporate plaza back in 1994. Mark my words.
Funny how the developers have such a short term memory.

And the Olympus headquarters and the rest of the industrial park next to the Promenade.

Come to think about it, there are quite a few developments that were built along Camp Meeting Rd. There were many sinkholes in the former farm fields, which houses sit today! I don't think the developers know about this, unless the Upper Saucon Township supervisors told them?