Sunday, February 12, 2012

Potential buyer found for Divine Lorraine Hotel

"The owners of the Divine Lorraine Hotel have entered into an agreement with a local developer who would buy and renovate the derelict landmark on North Broad Street, a member of the ownership group said Friday.

Michael Treacy Jr., one of the partners that owns the building, would not identify the company, but said the Philadelphia developer had an option to take over the abandoned hotel and an adjacent three-acre vacant lot.

The potential buyer is examining the specifics of a deal, he said.

"We should know within 30 days of their due diligence if they will proceed or not," Treacy said. "All indications are looking good."

Treacy and his father, Michael Sr., a local builder, were part of an investor group that paid $10 million in 2006 for the 118-year-old building and land. The other partners were Sunergy Housing, a Dutch firm, and Michigan-based NSI Real Estate Group.

The partnership had ambitious plans to restore the hotel and build residential towers on the vacant lot. But the economic downturn derailed the project.

"The financial collapse made it impossible to get funding to do the project," Treacy said.

In recent months, political pressure has been building for the owners to sell the blighted property.

Mayor Nutter last Monday told the Greater Philadelphia Chamber of Commerce that the Divine Lorraine was standing in the way of a rebirth of North Broad Street and that he wanted to see it restored.

The current owners owe the city $702,779.82 in back taxes and defaulted on a construction loan from the union-owned Amalgamated Bank of New York.

Treacy said the option with the Philadelphia developer was "arranged with the bank and us."

This is the fourth potential deal to sell the Divine Lorraine in recent years, Treacy said. He did not know what the plans might be for a new owner."

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