Anatomy of a Deal
A crew of between 20 and 25 convenes nearly every day at the Four Points by Sheraton Columbus-Airport. As winter draws to a close, the team from Miles-McClellan Construction & Development is working on the exterior insulation and finish systems and wrapping up the electrical and plumbing work. Dan Shah, region manager for Darpan Management and VJP Hospitality, likely started his day at the Hilliard, OH office before visiting one of the four other hotels he also oversees.
It's business as usual at both locations, but don't think it didn't take a lot of work to get to this point. Construction began July 26 last year, but plans for this $12-million project began almost a year before when Shah first saw the site.
After successfully owning and operating four midscale and economy hotels, VJP and Darpan decided the time was right to develop an upscale property. The group nearly pulled the trigger on a site in nearby Dublin, but decided to pass. What follows is a month-by-month look at how this deal came together:
Late Summer 2007 — Dan Shah drives by a 3.3-acre tract of land with a for-sale sign two miles from the Port Columbus Airport. He calls owner Plaza Properties and finds out the land is zoned for commercial use.
Late Summer-Early Fall — Shah and his group begin looking at IHG's Hotel Indigo, Hyatt Place and Starwood's Four Points by Sheraton brands. Shah finds information online and gets in touch with Starwood's development team. Columbus-based Jamey Cua, Starwood's senior director of development in the Midwest, quickly arranges a meeting. Shah takes a closer look at the land after showing it to VJP partners Victor Shah (CFO), Jay Patel (president) and Paul Patel (CEO). The group hires a consultant for an environmental site assessment, Shah gets in touch with Rick Lentz of Peoples Bancorp and the two start talking about a loan.
October — The plan is quickly coming together. Victor, Jay and Paul sign a franchise agreement with Starwood, contingent on the land purchase, while the loan agreement is simultaneously approved for between $9-10 million, to be amortized over 20 years. VJP is putting roughly 25 percent down.
December — With the land purchase nearing completion, the group hires Dave Pontia of Pontia Architecture to lead the construction. He gets the initial design drawings of the new Four Points prototype from Starwood.
January 2008 — There's no turning back now. The group closes on the real estate for $1.3 million with the help of its corporate lawyer, who also worked on the franchise contract and loan agreement. Shah said everything went smoothly and a broker wasn't necessary. Pontia begins putting together his design team of engineers (structural, mechanical, electrical and civil) and works on adapting the design drawings to fit this site. One key change must be made: The prototype calls for six floors, two more than allowed by the city because of the airport.
January-February — The preliminary drawings of the four-story, 110-room hotel are nearing completion and the group starts interviewing construction companies before asking them to bid on the project.
February-March — The group sends the updated drawings to Starwood for final approval. Pontia continues working informally with the city while turning the design drawings into the construction documents, which he calls the “actual recipe to build the hotel.”
April-June — The group chooses Columbus-based Miles-McClellan Construction & Development to build the Four Points. Preparation begins at the site as Pontia finishes more detailed plans to be submitted to Columbus for the building permit. Shah and his group get to know the Miles-McClellan construction team led by Project Manager Scott Joplin. It's Pontia's job, as the architect, to make sure the construction drawings pass muster with the city, but Shah is copied on all correspondence throughout the process and gets involved when decisions must be made. Pontia did the job well, apparently, since Shah says the process “went smooth;” adding, “To be honest, I don't remember anything about it.”
July 26, 2008 — Columbus approves and the building permit is issued. Everyone gathers at 3030 Plaza Properties Blvd. for a celebration and the first shovels break ground. The construction loan officially kicks in and will become a permanent loan once the hotel opens.
The heavy lifting has finally begun, but in many ways, the hardest part is over.
ANATOMY OF DEVELOPMENT
In this six-part series, Lodging Hospitality will take you behind the scenes and inside the heads of those who are bringing the Four Points by Sheraton Columbus-Airport to life.
January 1 — Introducing the Project
March 15 — Making the Deal (This Issue)
May 1 — Branding & Management
July 15 — Architecture & Design
Sept. 1 — Ramping Up
Oct. 15 — Grand Opening
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© 2012 Penton Media Inc.
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