Financing in hand, $370 million Austin Fairmont project now a go

Oct 24, 2014
Austin American Statesman

The developer of a Fairmont convention hotel planned for downtown Austin has obtained financing for the project, clearing the way for the $370 million luxury hotel to break ground next month and add more than 1,000 rooms to the market

Los Angeles-based Colony Capital LLC will finance the hotel, which will be built on a 1.74-acre site at East Cesar Chavez and Red River streets

At 37 stories and rising 595 feet, the hotel would be one of the tallest buildings in Austin’s skyline when it opens. With 1,066 rooms, it would be the city’s largest hotel, surpassing the 34-story, 1,012-room JW Marriott convention center hotel that is currently under construction downtown and scheduled to open in February

Groundbreaking for the Fairmont is scheduled for Nov. 3, with plans for it to open in June 2017

“It’s time for construction of the Fairmont Austin to fire on all cylinders. We’re thrilled to have aligned with a first-class operator in Fairmont and a premier funding source in Colony Capital, and it’s all the more exciting given how strongly we believe in Austin,” said Doug Manchester, president of Manchester Texas Financial Group, a subsidiary of Manchester Financial Group, the San Diego company chaired by Manchester’s father, known as “Papa Doug.”

Since plans for the Fairmont were announced in 2011, some real estate and hospitality industry experts had been skeptical that the project would move forward, especially with the JW Marriott project already underway. The Fairmont project had several false starts to its timetable for breaking ground, and plans for the hotel have evolved several times. Initially, Manchester envisioned a tower of up to 50 stories

But Manchester has consistently contended that there is enough demand for both its hotel and the JW Marriott, which will be the largest JW Marriott in the United States and the second-largest JW Marriott in the world

Hotel industry experts and local convention officials have said that Austin needs another convention-sized hotel to supplement its only existing one, the 800-room Hilton Austin, and bump the city into the next tier for attracting ever-larger conventions

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