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Michigan
Hoteliers Do It Their Way With Multimillion Dollar Loan From Kennedy
Funding
HACKENSACK, NJ, JULY 16, 2001
— When Susan and John Payne of the Dudley
Corporation sought funding for construction of their unique concept
of a Victorian hotel on the Muskegon Lake shorefront in Michigan,
few banks would support their independent vision for the hotel.
A $6.6 million
loan from Kennedy Funding, a direct private lender based in Hackensack,
N.J., is now providing
the company with the resources to realize their vision.
Unable to locate a traditional lender willing to finance the construction
of their 140-room Shoreline Inn & Suites, the Paynes invested more
than $3 million in the project's development. Contractors put in
another $3.5 million of unpaid work into the project until work
was halted in July 2000 due to financial problems. Kennedy Funding
and the Paynes have now reached an agreement where Kennedy will
provide a multimillion dollar loan to permit completion of the ten-story,
$11 million building enabling the hotel to open by the end of the
year.
According to the Paynes, traditional lenders pressured them to make
their hotel a franchise or flag operation with a brand entity such
as Holiday Inn or Sheraton. Susan Payne also indicated that many
of the Michigan banks are being taken over by outside institutions
who are following Wall Street's warning to stay clear of the hospitality
and restaurant industries as investments.
"We did extensive research and competitive analysis of the hotel
market in Michigan," said Susan Payne, "and we wanted to remain
independent because we want our hotel to have its own personality."
"After our investigation and assessment of the market, we saw the
Shoreline Inn as a viable business opportunity with a strong niche
in the Muskegon region that made it a good investment," says Henry
Haskell, a principal with Kennedy Funding.
Haskell explained that Kennedy Funding has more flexibility than
traditional lenders in configuring its loans and relies on its own
staff of financial experts to evaluate risks.
The Paynes' have a great deal of insight into the local Michigan
hotel market and firmly believe that the flags or franchises are
not a good fit for the Muskegon market as they cater more towards
the economy and budget consumer or focus too heavily on convention
and banquet business.
"Our only competitor in the Muskegon market is the Holiday Inn which
is a rehabbed Hilton," says Susan Payne. Payne says that the Shoreline
Inn & Suites can easily compete against the Holiday Inn's small
rooms, unattractive pool, and existing rate structure.
The Paynes say they are extremely pleased with support of Kennedy
Funding and their quick response to their funding needs. While the
Paynes are paying above market rates to Kennedy, it is far less
expensive and restrictive than acquiring a partner or becoming a
franchisee.
"Mr. Haskell is a good businessman and has tremendous integrity,"
says Susan Payne.
"The average conventional lender looks for predictable, safe loan
scenarios that fall only within acceptable risk parameters or they
reject them outright," says Kevin Wolfer, also a principal with
Kennedy Funding. "At Kennedy, we have been fortunate to engage in
a broad spectrum of lending situations that have prepared us to
devise creative, innovative financial solutions to borrowers facing
critical junctures due to time, legal issues, and financial constraints.
Our solutions also safeguard the borrowers' desires to remain independent
and not take on partners or other forms of restrictive co-investment
that entail relinquishing control."
Upon completion, the Shoreline Inn & Suites will become Muskegon's
first waterfront accommodation and one of the tallest buildings
in town. Designed as a unique Victorian style hotel, the Shoreline
Inn will offer gracious charm coupled with extraordinary views of
Muskegon Lake. The 140 suites, including ten penthouse suites, are
all being decorated and furnished in various Victorian themes, yet
will feature all of the latest amenities such as large color TVs,
refrigerators, microwaves, coffee makers and small kitchen facilities.
Additional facilities will include a heated indoor pool, two hot
tubs, an exercise room and gift shop. While the hotel is steeped
in an elegant Victorian atmosphere, it will be electronically advanced
and feature the latest communications connectivity, including voice
mail, Internet, email and fax. The doors will be electronic and
keyless.
Muskegon is only 40 minutes from Grand Rapids and has easy access
to I-96 and is only 1.5 hours from Lansing or Kalamazoo. The area
is a popular summer resort area and haven for summer festivals.
Within a short drive of the hotel, there are numerous amusement
parks, golf cours, and area recreational facilities.
"Its location and the strength of the Muskegon area as a resort
destination are strong points in favor of the Shoreline Inn's success,"
says Haskell.
Although they are primarily a direct private lender in the commercial
real estate arena, Kennedy Funding has a diverse lending history
that includes successful loans to sports complexes, amusement parks,
airlines, and land development companies. The firm provides loans
covering an array of financial situations including successfully
dealing with commercial property workouts, foreclosure situations,
bankruptcies, and scenarios that require innovative financial strategies.
A key lender in commercial real estate projects nationwide, Kennedy
Funding has also completed high profile commercial loans in the
international arena, as well.
"More and more commercial borrowers are becoming frustrated by the
lack of flexibility and shortsightedness of conventional lenders,"
says Haskell. "The other major issue is with responsiveness. To
succeed today, entrepreneurs and businesses need to act in real
time to respond to market conditions that change daily, sometimes
hourly. The delays and red-tape prevalent in traditional lending
processes present real obstacles to the success and survival of
business projects."
Kennedy Funding's expertise in due diligence and risk assessment
enable the lender to support commercial investments of virtually
any type. Unlike conventional banks, Kennedy responds to loan requests
rapidly and issues decisions immediately. The lender can provide
up to $300 million in as little as two weeks and a commitment in
just two days with an up to 65% loan-to-value ratio. In the past,
Kennedy has issued multimillion dollar loan commitments in as little
as 24 hours.
Direct private lenders, such as Kennedy, offer a quick response
to loan requests, diverse experience, flexibility in loan configuration,
and the ability to devise innovative solutions to a broad range
of lending scenarios that traditional lenders cannot match.
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Million loan from Kennedy Funding delivered in record time
to development company in Florida |
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meet steamrollers as Kennedy Funding loans $18.5 million
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time |
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condos |
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Community adjacent to Vail's Keystone Resort |
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Funding Lends $2.3 Million to Mexican Developers |
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issues $5.3 million loan to Travis Boats & Motors (NASDAQ: TRVS) |
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bails out South Florida Developer with quick $3 million second
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lends $1.8 million to Port Saint Lucie, Florida Developer |
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In
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Quick
$3.5 Million Loan by Kennedy Funding Funds Acquisition of Former
Hospital |
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Do It Their Way with Multimillion Dollar Loan from Kennedy
Funding |
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Guccione
Gets $35 Million Reprieve |
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NJ Lender
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Kennedy Funding
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Kennedy
Funding Plays Key Role in $66 Million Loan to Florida
Developer |
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Kennedy Loan
Funds Conversion of Dormant Inn to a State of
the Art Ramada Plaza Hotel |
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Kennedy
Funding Lends $16.5 Million to Developer of Arizona
Championship
Golf Club |
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Private Lenders
Emerge as Main Source of Capital as $30 Billion
in Commercial
Loans Are at Risk |
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Lender Provides $7.1 Million Loan for Major Land
Deal
in Texas |
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Kiwi Gets $2.2
Million to Help Recovery |
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Kennedy
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bankruptcy |
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Kennedy
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Kennedy
Funding lends assisted-living housing facility $500,000
to pay down $1.9 million Hud loan |
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Kennedy Funding's
$7.6 Million Loan Helps MPTV, Inc. Launch Las Vegas Time
Share Project |
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Kennedy
Funding rescues bankrupt developer with creative financing |
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