Progress seen in Marriott hotel financing

Syracuse, NY -- The developer of a proposed 180-room Marriott hotel in Syracuse’s Armory Square said things are looking up for the project, which was put on hold a year ago. Richard Sykes Jr., of RHS Holdings LLC, said he is making progress in the hunt for financing of the $31 million project. He said he has obtained a...

Syracuse, NY -- The developer of a proposed 180-room Marriott hotel in Syracuse’s Armory Square said things are looking up for the project, which was put on hold a year ago.

Richard Sykes Jr., of RHS Holdings LLC, said he is making progress in the hunt for financing of the $31 million project. He said he has obtained a term sheet with a bank, outlining the terms under which the bank would provide a construction loan, convertible into permanent financing once the hotel is up and running.

Term sheets are similar to letters of intent, laying out the terms of a possible agreement. Like letters of intent, they are not binding. But it is a major step to securing financing, Sykes said. “We’re actually getting kind of excited about it,” he said.

He declined to identify the bank with which he is negotiating.

Sykes announced plans for the project in 2008. The hotel — actually two hotels — would be built on the northwest corner of South Franklin and West Fayette streets. The project would consist of a 102-room Marriott Courtyard, a traditional hotel; and a 78-room Marriott Residence Inn, designed for extended stays.

But a year later, he had to put the project on hold because expected bank financing fell through. Sykes said banks were reacting to a major downturn in the hospitality industry, the result of one of the country’s worst recessions in decades.

But there are signs that lenders are beginning to show an interest in the hotel market once again, he said. “It seems to be letting up slightly,” he said of the industry’s credit crunch.

Sykes said his project’s prospects also have been helped by the construction of the Washington Station office building on the north side of the same block. The Pioneer Cos. is nearing completion of the building, which will serve as the new headquarters of the O’Brien & Gere engineering company.

O’Brien & Gere’s presence should drive a lot of business to the hotel, Sykes said. O’Brien & Gere will employ about 300 people in the building. The company does business throughout the country.

Sykes said construction could start as early as mid-fall if financing comes through.

Ben Walsh, deputy commissioner of city’s Office of Neighborhood & Business Development, said the project’s location is also a plus. “Armory Square is really the economic and cultural engine of downtown Syracuse,” he said.

Contact Rick Moriarty at rmoriarty@syracuse.com or 470-3148.