Gardenwalk Hotel II, LLC
333 City Boulevard West, Suite 2000, Orange, CA 92868
Tel: 714-399-9300
C ity of Anaheim
200 South Anaheim Boulevard, Suite 356
Anaheim, CA 92805
February 28, 2024
City of Anaheim
200 South Anaheim Boulevard
Anaheim, CA 92805
Attention: City Clerk Attention: City Attorney
Re: Development Agreement No. 99-1/Extension Request by Hotel No. 2 Ladies and Gentlemen:
In response to City Council’s action to establish new development timeframes for Hotel No. 2, we are writing to respectfully request an extension to our construction start and completion dates by two years, which will hopefully allow time for the financial markets to settle and stabilize. As previously reported, Hotel No. 2 has been delayed by the pandemic and resulting governmental orders, as well as their continuing impacts. As a result, the current deadline for construction commencement for Hotel No. 2 has passed.
A
s we have previously reported, Hotel No. 2 has been diligently working with potential hotel brands, and our architect has completed initial site plans and layouts. As the City is aware, the Federal Reserve is aggressively fighting inflation by raising interest rates, which has had a substantial negative impact on construction financing. Due to the lending markets’ frozen climate, financing costs have more than doubled beyond our original underwriting. Additionally, interest rates have continued to rise, coupled with continuing volatility. We are continuing to monitor the debt market in the hope that interest rates will eventually stabilize, but we do not yet know how long these conditions upon the lending market will last.
B
ased upon the foregoing, we propose that the construction start date be extended to November 12, 2025 and the completion date be extended to May 12, 2028.
I
f you have any questions, please don’t hesitate to contact us.
Very truly yours,
G
ARDENWALK HOTEL I, LLC,
a California limited liability company
B
y: Prospera Properties III, LLC,
a Delaware limited liability company
Its: Manager