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Convention Center's Delay Complicates Hotel Plans

BOSTON-The proposed Convention and Exhibition Center here is in serious danger of not meeting its scheduled opening, but damages to the hotel adjacent to it resulting from such a delay are capped at $3 million.

By Naomi Grossman | Updated on January 31, 2001

BOSTON-The possible delay in the opening of the proposed Convention and Exhibition Center here on the South Boston waterfront has far-reaching implications for the adjacent Convention Center Hotel being developed by Starwood Hotels & Resorts Worldwide Inc. According to an agreement, Starwood’s damages have a cap of $3 million.

The development agreement was just amended this past December between the Massachusetts Convention Center Authority and Starwood Carpenter Convention Hotel LLC, which is Starwood and its local development company, Carpenter & Co. It limits Starwood’s damages to its costs for the hotel’s design, permitting and development. That figure is capped and it is unclear if Starwood has invested more than that at this point in the process. Reportedly, Starwood would also be entitled to a return of its $15 million deposit, but that money was considered nonrefundable so it is unclear if Starwood would actually be able to retrieve that amount.

According to Andy Antrobus, spokesperson for the MCCA, deadline for opening the convention center is the end of the first quarter in 2004, although the agreement does include a number of provisions. Because MCCA is not very far along in the development process and because the ground lease with Starwood was not yet signed, Starwood is not entitled to more than the $3 million if the convention center opening is postponed. If these situations changed, Starwood could receive an annual rent abatement of $8.42 million during a delay.

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