As the Board is aware, one of the cornerstones of our community’s ongoing renaissance is the revitalization of The Hacienda Hotel.

As the Board may recall, the sale of The Hacienda from the City to the CRA and then to the Hacienda Hotel Florida Corporation evolved over time; and while the broad framework of the transaction remained consistent, the specific terms of repayment changed between the original Lease Agreement with Option to Purchase, dated June 19, 2018, and the later Mortgage Note, dated May 13, 2021.

The attached table compares the key repayment terms of the respective contracts. As set forth by the table, under the more recent Mortgage Note, the borrower was required to start repayment before receiving the Certificate of Occupancy and lost the operational and repayment flexibility specifically afforded by the terms of the earlier Lease Agreement with Option to Purchase. While these changes might be considered favorable to the CRA’s short term finances and desirable in the absence of competing considerations, they came at the expense of the new owner’s flexibility and ability to meet contingencies during the start-up phase of operating a niche hotel property that is subject to special costs and challenges, not to mention the pandemic.

Given the earlier terms of the deal and the belief that the long-term success of the Hotel is of paramount importance to the CRA, community, and all concerned, staff is recommending that the repayment terms of the Mortgage Note be amended to be more closely aligned with the original deal as set forth on the following page.