11th hour for hotel: Land deal poised to expire on proposed Northampton project
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NORTHAMPTON - A controversial quest to build a Hilton Garden Inn hotel downtown faces a deadline in two weeks - and the possible loss of its deal to buy city-owned land for $1.
The city has already granted a half-dozen extensions to the Pioneer Valley Hotel Group, which won approval more than two years ago to build an estimated $14 million, 112-room hotel and parking garage behind Pulaski Park in the city's Round House parking lot.
The purchase-and-sale agreement between the city and a developer expires Dec. 31.
Shardool Parmar, president of the Ludlow-based hotel group, Tuesday said he hopes to have news on the project later this week.
"These things just have taken a lot longer than people assumed," Parmar said.
In June, he said his company had received a financial commitment from Berkshire Bank in Pittsfield and that construction of the controversial hotel was expected to begin later in the summer, taking 12 to 18 months to complete.
Parmar told the Gazette this week that he has no new information to provide about the project's status. Asked whether the company is still trying to close the deal with the city by Dec. 31, Parmar replied: "We are all working toward that goal."
Meantime, Mayor Clare Higgins, who approved a six-month extension to the hotel group in June, declined to say definitively whether she would extend the deadline on the deal again when it expires Dec. 31.
"It's possible," she said.
Higgins said she plans to talk with the City Council before taking any action on an extension request. The council's last meeting of the year is tonight.
"I'm not ready to speak to that at this point," Higgins said. "We'll have to cross that bridge when we come to it."
Financing quest
Higgins said the Pioneer Valley Hotel Group has been making a good-faith effort to line up financing to develop the hotel and parking garage and noted the company began doing so as the global economy tanked. She said the city wants to ensure that the hotel group's financing is sound before the city sells and relinquishes what many view as prime downtown real estate.
"We don't want somebody to get halfway through a construction project and have it go belly up," Higgins said.
Asked whether he could provide details about the status of hotel and the city's talks with the hoteliers, City Planner Wayne M. Feiden said he did not have an answer.
"The details of this are now in the lawyers' hands," Feiden said.
In 2006, the city chose the Pioneer Valley Hotel Group as the winning bidder to redevelop the Round House lot, which has since undergone an extensive, $6.4 million cleanup of 12,000 tons of coal tar-contaminated soil.
The project was controversial from the get-go, from the city's requests for proposals process to its decision to sell the property for $1 to the Pioneer Valley Hotel Group.
It spawned several lawsuits against the company and the city, including a complaint by Robert G. Curran Jr. of Miami Beach, Fla., the sole competing bidder, who still owns the Roundhouse building.
The litigation and negotiations with Bay State Gas Co., which paid for and oversaw a longer-than-expected cleanup, contributed to earlier project delays, though financing construction of the hotel and garage appears to remain the primary obstacle today.
The Pioneer Valley Hotel Group received building, site plan and special permit approvals from city boards more than two years ago. As recently as five months ago, it sought and gained approval for three site-plan amendments, including adding 11 rooms to the hotel, building a greenhouse and delaying construction of the parking garage until after the hotel is built.
Calling the site "extremely difficult," Parmar told the Gazette in June that his company had already sunk $2.5 million in development costs into the project, including finishing up Bay State Gas Co.'s work.
"We have spent $750,000 of our own family money with no guarantee that it's ever going to go forward," he said at the time.
In an unrelated development, Parmar & Sons Inc. of Hadley, a company affiliated with the Pioneer Valley Hotel Group and owned by the Parmar family, recently bought the former Hadley Village Barn Shops plaza on Route 9 for $2,275,000. The plaza is located in front of the company's Hampton Inn hotel on Bay Road.
Dan Crowley can be reached at dcrowley@gazettenet.com.
