The union has just invested tens of millions of dollars in equity into the development of 33 Arch St., a 33-story office tower in the heart of the financial district here. It was at the groundbreaking ceremony for the tower that Frank Carroll, of the IBEW, announced that the union is interested in investing in the headquarters hotel.
"He said it from the podium," Dean Stratouly, the developer of 33 Arch Street and a member of the state board that oversees the convention center project, tells GlobeSt.com. "He said this was the first of many projects in which the unions are coming together with private developers and they are even interested in the convention center hotel."
As Stratouly points out, the union is a nine billion-dollar fund with huge liquidity. "They are going to become a real powerhouse in the real estate business," notes Stratouly. "They are a big fund generated from construction activity. It's beneficial to invest in its own trade. They are doing that now and getting a good yield on those projects- but they need to look at big projects."
That is music to the developers of the headquarters hotel's ears, as the slowing economy has made lenders leery of investing in a large hotel project. Rising construction costs haven't helped as the project costs for the hotel have reportedly risen from $268 million to over $300 million. Convention center officials are also interested in seeing the hotel nail down financing as it is widely believed that without the hotel nearby, trade show promoters and associations won't be interested in booking the center.
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