The Kansas City Business Journal headline from July 21, “Convention hotel raises a different flag,” conceals almost as much mayhem as a headline reading, “Man ditches bride for maid-of-honor at altar.”
The spurned bride, the Hyatt Hotels Corp., reportedly did not know it had been jilted until informed by an unknown emailer. In fact, Hyatt was unaware there was a rival for the affection of the developers behind the deal, KC Hotel Developers, until their engagement had been cancelled.
Reported the Business Journal, “A development official with Hyatt Hotels Corp. said he was ‘stunned’ and ‘disappointed’ to learn — via an email last month — that the developers of a $310 million convention headquarters hotel in downtown Kansas City had decided to replace Hyatt as the operator.”
A July 21 Business Journal headline told a more precise story of Hyatt’s jilting than the July 20 headline: “Exec: Hyatt got the boot after lending a hand with convention hotel equity.” The proposed hotel is now the love child of the Loews Corp., whose contribution as a joint equity partner has not yet been disclosed.
“[Hyatt] spent 4 years working on this and neither the city nor developer had the courtesy or backbone to speak to them,” a CFRG spokesman told the Sentinel. “The Hyatt [execs] were so ticked off they flew down to see the mayor in his office June 28.”
David Tarr, Hyatt’s senior vice president of development, is crying foul. He told the Business Journal he had been surprised to discover some time earlier that KC Hotel Developers was something like $30 million to $40 million short on equity. This may have come as news to the City Council, which had been told repeatedly that financing was all tied up.
“When we partner with a development group, we like to know that they have the most meaningful portion of the equity (in a new hotel project),” Tarr told the Business Journal. “We came to the table with this group because we felt that they had the wherewithal to assemble the capital to do the project and that our equity was not required.” He added tartly, “And it was news to us when they ended up not having it.”