NEW YORK, Aug. 2 /PRNewswire-FirstCall/ -- Morgans Hotel Group Co. ("MHG") today announced that the joint venture developing a Mondrian in SoHo has procured additional funding to complete development of the hotel. The new hotel is expected to open in January 2011 with a restaurant, bar, and other facilities. MHG has a 10-year management contract with two 10-year extension options to operate the hotel upon completion.
MHG also announced that the parties amended the debt financing on the property, among other things, to provide for extensions of the maturity date of the mortgage loan secured by the hotel for up to five years with extension options, subject to certain conditions.
In addition to the new funds provided by the lender, subsidiaries of CapitalSource Inc., MHG's financial and developer partner in the joint venture, Cape Advisors, is making cash and other contributions to the joint venture, and MHG will provide up to $3.2 million of additional funds to complete the project. MHG's contribution will be treated as a loan with priority over the equity.
Marc Gordon, President of MHG said, "The additional funding allows us and our partner to focus our attention and resources on completing this spectacular new hotel in downtown New York. We appreciate the support of CapitalSource, which recognized the strong appeal and long-term value of this hotel, and our unique ability to maximize its potential."
Mondrian in SoHo will be the third Mondrian and MHG's downtown New York debut. Designed by Benjamin Noriega Ortiz and located on a cobblestone street, the hotel will present a unique SoHo style and hotel experience. As one of the tallest buildings in its area, it will offer exceptional panoramic views. Chef Sam Talbot will introduce his interpretation of modern day east coast seafood, and the bar will offer a selection of custom-designed cocktails.
About Morgans Hotel Group
Morgans Hotel Group Co. is widely credited as the creator of the first "boutique" hotel and a continuing leader of the hotel industry's boutique sector. Morgans Hotel Group operates and owns, or has an ownership interest in, Morgans, Royalton and Hudson in New York, Delano and Shore Club in South Beach, Mondrian in Los Angeles and South Beach, Clift in San Francisco, Ames in Boston, and Sanderson and St Martins Lane in London. Morgans Hotel Group and an equity partner also own the Hard Rock Hotel & Casino in Las Vegas and related assets. Morgans Hotel Group also manages hotels in Isla Verde, Puerto Rico and Playa del Carmen, Mexico. Morgans Hotel Group has other property transactions in various stages of completion, including projects in SoHo, New York and Palm Springs, California. For more information please visit http://www.morganshotelgroup.com/.
Forward-Looking and Cautionary Statements
This press release may contain certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements relate to, among other things, the operating performance of our investments and financing needs and prediction of certain future other events. Forward-looking statements are generally identifiable by use of forward-looking terminology such as "may," "expect," "anticipate," "estimate" "believe," "project," or other similar words or expressions. These forward-looking statements reflect our current views about future events and are subject to risks, uncertainties, assumptions and changes in circumstances that may cause our actual results or other future events to differ materially from those expressed in any forward-looking statement. Important risks and factors that could cause our actual results to differ materially from those expressed in any forward-looking statements include, but are not limited to economic, business, competitive market and regulatory conditions such as: a sustained downturn in economic and market conditions, particularly levels of spending in the business, travel and leisure industries; continued tightness in the global credit markets; general volatility of the capital markets and our ability to access the capital markets; our ability to refinance our current outstanding debt and to repay outstanding debt as such debt matures; our ability to protect the value of our name, image and brands and our intellectual property; risks related to natural disasters, such as earthquakes, volcanoes and hurricanes; hostilities, including future terrorist attacks, or fear of hostilities that affect travel; and other risk factors discussed in MHG's Annual Report on Form 10-K for the fiscal year ended December 31, 2009, and other documents filed by MHG with the Securities and Exchange Commission from time to time. All forward-looking statements in this press release are made as of the date hereof, based upon information known to management as of the date hereof, and MHG assumes no obligations to update or revise any of its forward-looking statements even if experience or future changes show that indicated results or events will not be realized.
Morgans Hotel Group Co.
CONTACT: Jennifer Foley, Vice President of Public Relations, Morgans
Hotel Group, +1-212-277-4166, jennifer.foley@morganshotelgroup.com
Web Site: http://www.morganshotelgroup.com/
