CentrePointe rendering
The financing of the controversial CentrePointe mixed-use development project in downtown Lexington has been somewhat mysterious over the eight years since old buildings were demolished and excavation began on the block bound by Main, Vine, Upper and Limestone streets.
Developer Dudley Webb, in partnership with Lexington landowners the Rosenberg family, have struggled with the project that would include a Marriott hotel, Residence Inn and an office tower with condominiums and apartments, all built over a parking garage. How it would be paid for has been somewhat cloudy.
“The financing now is being done privately,” Webb recently told Business Lexington. “The lenders aren’t involved at the moment but will be as we progress with the work.”
Webb said he is personally financing the 700-car parking garage, the platform on which the rest of the buildings will rest and which occupies the entire block. The garage is scheduled to be completed in 2017.
Recently filed public records show CentrePointe financing linked to an entity known as Interbanque LLC.
“That vehicle is called Interbanque, which is merely internal within our group to get this done,” Webb said. “What we’ll do is that the minute the garage is completed is to go to the bond market and issue bonds that will reimburse us for what we have in it. We’ll keep ownership of the garage.”
Interbanque was formed in 2005 as a limited liability company, a private start-up, in Delaware, where many companies, from small operations to Fortune 500 giants, incorporate because of its modern and corporate-friendly court system known as the Court of Chancery.
Financial records indicate increments of $27.5 million associated with various elements of the CentrePointe project, under headings that include “Apartments at CentrePointe,” “CentrePointe Hotel,” “CentrePointe Parking Co.,” “Fayette Land Co.,” “Offices at CentrePointe” and “Penthouses at CentrePointe.” Added up, the components appear to total $165 million. However, Webb dismissed that calculation.
“The $27.5 million is the funding we are putting into the garage only. Interbanque will loan us the money, and Interbanque will be paid back through the bond offering. It is only for the garage. It is merely a means to get the garage done,” he emphasized.
Webb refers to the five project components as “airlots” and the entire project “a condominium structure.” He urged people not to think of it in terms of use but more like a box. Within that box will fit the hotels, office building and condominiums. There will be separate ownership of those components and separate financing.
As for who will own the other structures, Webb said: “It will vary. I have different partners in the hotels and the garage and office building. The condos will be sold off individually. As soon as the plans and building permits are complete, we’ll go in and put construction loans on those component parts.”
In a few weeks, Webb said, he will announce hotel partners.
“It is a national-based company, but I can’t announce who they are yet,” Webb said. “They don’t come into play until you get (construction) to the top of the garage.”
Several years ago, Webb announced that he had had a foreign investor in the project but that the unnamed man died and his family declined to continue in the partnership. In May, Webb described the late mystery partner only as “a German national and Swiss citizen who ran a French company.”
Recently, Webb also announced design changes for CentrePointe. The office tower, which was last planned to have 10 stories, will now be 12 stories, with condominiums above. The condos were originally planned for the top of the hotel.
“It’s the grid that is the issue,” said Webb. “The footprint of the hotel rooms themselves is smaller than the footprint of the condos and apartments above them. We decided it would be just easier to move them to the top of the office building, which is a bigger footprint.”
Webb has said that the two hotels, office tower and condos should be “mostly complete” in 2018.
Webb expected no problems when the new designs came before the Courthouse Area Overlay Zoning District Board, which reviews such plans in the downtown core.
“All of the design elements that were shown to them at the last hearing have been incorporated into the adjusted design,” he said.
In early October, D.W. Wilburn Construction of Lexington was awarded the contract to build the garage. The company reportedly has been pouring concrete night and day. A live web cam stationed high on a building across from the worksite shows regular activity.
“That tells you how committed they are,” said Webb. “They’re all over it.”
Two cranes on the site that had been idle for two years and which Webb once said cost him $35,000 a month, are operating again. Although the garage will be built first it will not open to the public while the rest of the construction is going on above it.
“As a practical matter, that’s true,” the developer confirmed.
For anyone concerned the long delayed project might not be on track, Webb offered an optimistic take.
“It’s going to be fun and exciting now,” he insisted. “They can sit back and enjoy.”