Friday, September 11, 2015

Procida Kicks In $35M for Divine Lorraine Redevelopment

by Steve Lubetkin,
An array of public and private partners, including Billy Procida’s 100 Mile Fund, says it has finalized about $44 million in financing for the transformation of the city’s historic Divine Lorraine Hotel into a mixed use multi-family and commercial building.

Washington Square Realty Capital arranged for $34.75 million in construction financing, provided by Procida Advisors and its 100 Mile Fund. The Philadelphia Redevelopment Authority, the City of Philadelphia and the Philadelphia Industrial Corporation are also contributing to the project, spearheaded by Eric Blumenfeld Realty Management.

“The collaboration that existed between borrower, lender, City, State and third party professionals for the better part of two years was remarkable and speaks volumes about how important this project is to Eric Blumenfeld, the City of Philadelphia and the Commonwealth.  It’s not every day that a real estate financing assignment makes you proud to be a Philadelphian, this is one of those times, I am so happy for Eric and his team that they finally can make this vision a reality.”

Kyle Funsch and John Mullane, principals at Procida Funding, tell exclusively that Procida took the strategy of  having “the mindset of a developer” in its financing of the project. The firm has extensive experience financing redevelopment of distressed properties, including several in Philadelphia.

They’re preparing for the grand opening later this year of the Mural Arts Lofts, a Blumenfeld project Procida also financed near the Divine Lorraine. The project converted a former school building into upscale loft apartments.

“He is a visionary, and his vision to restore the North Broad Street corridor is spectacular,” Mullane says of Blumenfeld. “I think that we can help him execute on the project and bring his dream to fruition.”

“We’re here for capital and discipline,” says Funsch. “We believe in Philadelphia. Everyone wants to see the Divine Lorraine succeed.”

The project will include affordable housing accessible to Temple University students and young professionals, Mullane says.

Domus Construction has been engaged as the general contractor and construction will begin almost immediately, with initial occupancy slated for the fall of next year according to Robert Malgolis, partner and project manager for Domus.

"The exterior of the historic Divine Lorraine Hotel will be restored to its original grandeur with the interior being renovated into 109 unique and elegant residences with close to 20,000 square feet of restaurant and retail space designed to honor its great history."

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