Loeb-owned hotel loan sees restructuring

The Renaissance Waterfront Hotel, in Boston, is scheduled to be auctioned later this month after Loeb Partners Realty LLC — which also owns the Longboat Key Club and Resort — defaulted on a $90 million loan, according to reports by the Boston Herald and Boston Business Journal.

But Loeb officials say that the Boston hotel’s troubles won’t impact the Key Club or its proposed $400 million Islandside redevelopment project, which the town approved in June 2010.

Michael Welly, general manager of the Key Club, said that an agreement with the lender would likely be worked out within seven to 10 days, before the hotel goes to auction, and that the lender pursued the foreclosure process to protect its rights.

“The fact that we’re working out a deal that needs to be restructured should not be a surprise to anybody,” said Welly, noting that such arrangements have become normal in the current economic climate. “It would only be of concern if we walked away, which isn’t how we do business.”

Michael Brody, president and chief operating officer of Loeb, said that the Boston hotel and the Key Club have different investors and partners.

“They’re separate entities and separate partnerships,” he said. “There’s no connection between Boston’s capital and Longboat’s capital. There really is no relationship.”

But Bob White, president of the Islandside Property Owners Coalition (IPOC), which continues to challenge the Islandside redevelopment plan, said he believes the default raises concerns for the town.

“Loeb is the one that owns the Key Club, and Loeb is the one that, ostensibly, will be doing the project,” White said.

White said that the default raises the question of whether Loeb would be able to get financing for the project.

“I think it’s something that should raise a level of what could happen at the town level as far as what could happen as far as the club project,” he said.

But Welly is not concerned.

“If that’s the case, he should be dancing up and down,” Welly said of White’s suggestion that Loeb could be unable to obtain financing for the Islandside project.

Welly said that, to his knowledge, Loeb has never defaulted on a loan.

“We bought something at the top of the market,” he said. “Obviously, the market changed, the financial dynamics changed and we’ve had to work out an agreement.”

"We bought something at the top of the market. Obviously, the market changed, the financial dynamics changed and we’ve had to work out an agreement." 
— Michael Welly, general manager of the Longboat Key Club and Resort