San Marcos drops sale price for proposed hotel
from the North County Times (Dec 24, 2011):
Robert Rauch, a San Diego hotel owner and consultant, said San Marcos was a strong location for a new hotel, largely because the university would drive occupancy.
He said, however, that financing was exceptionally tight, and most lenders expect prospective borrowers to come up with half the cash required for their projects. The San Marcos project, he said, could cost about $18 million to build, including the land.
Rauch said the city loan was an unusual arrangement, and questioned whether the company would have sufficient capital to secure a loan for construction.
“It’s not typical that the city would loan them the money,” he said.
“If they can’t pay for the land, how are they going to afford to build a hotel?
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However, the arrangement could help with financing requirements by reducing the amount the company must borrow from other lenders, Rauch said.
“It’s a great deal, if they can get the city to loan them the money at a low interest rate,” he said.
