GLENDALE, Ariz., April 6, 2017 /PRNewswire/ -- AVANA Capital has provided a $21 million loan to fund the construction of a Hilton Garden Inn hotel in Lompoc, California, a coastal city in Santa Barbara County. It will be the first new hotel built in Lompoc in over 30 years.
Developer Atul Patel and his family are long-time area residents who've owned hotels in Lompoc for nearly three decades. They recognized a need in the market for an upscale hotel.
"Our property will be Lompoc's first full-service hotel with conference space to serve large groups," explains Atul Patel. "Individual visitors too, will now have a new and desirable place to stay. They won't have to travel 20-30 miles to other cities."
The Patels' Hilton Garden Inn will be a four-star hotel with 156 rooms, including 25 spacious "urban suites," ideal for long-stay guests. Amenities will include, 3,800 sq. ft. meeting space, restaurant, lounge, pool, whirlpool, fitness center and boardroom.
For years the Patels knew they were losing the business of area visitors to nearby towns with nicer hotels. The steady stream of military and government guests to Lompoc's Vandenberg Air Force Base came with per-diem budgets that allowed them to choose upscale accommodations.
Lompoc was also losing out on reservations from wedding and business groups because most of the city's hotels had fewer than 90 rooms.
Finally, a safety training center for firefighters and police opened in 2016 in Lompoc. Participants wanted to stay in a high-quality hotel during their 2-3 days of training.
The Patels were confident these factors would translate into sustained success for a new hotel.
Through a referral, the Patels discovered AVANA Capital, a lender headquartered in Glendale, Arizona, with $350 million set aside to fund community-based projects like hotels.
The Patels worked with AVANA Capital through the Small Business Administration. As an SBA loan, AVANA Capital was able to fund the hotel at 80% loan to value, whereas traditional lenders will typically only fund 65%-70% loan to value.
"By requiring less upfront capital, we were able to maximize the size and amenities of the hotel, which will result in a better property that generates greater revenue," Atul says.
When the Hilton Garden Inn opens in March 2017, it is expected to inject new life into the local community. Atul plans to hire 100-125 employees; 60 will be part time initially.
The hotel will pay $600,000-$700,000 per year in bed taxes. The Tourism Tax will generate another $120,000, which will go toward marketing the city.
"We feel confident the Hilton Garden Inn will be a catalyst for growth in Lompoc, and we're delighted to be a part of it," Atul says.
For their part, AVANA Capital too expresses enthusiasm. "We support building more hotels like the Lompoc Hilton Garden Inn," says Sanat Patel (no relation to the Lompoc Patels), co-founder and CSO of AVANA Capital. "Our mission is to provide small-business owners like the Patels with the capital they need to succeed. As a non-bank lender, we have the flexibility to work with entrepreneurs and fund promising new ventures that can grow the U.S. economy and generate jobs."
About AVANA Capital
AVANA Capital is a nationwide commercial real estate lender specializing in bridge, construction, and SBA 504 financing for niche businesses. Founded in 2002, the company has funded $900 million in loans, resulting in 9,000 jobs created and saved across the U.S. www.avanacapital.com
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SOURCE AVANA Capital