Author of www.HotelLawBlog.com
11 November 2006
Hotel Lawyer on hotel-mixed use. Earvin “Magic” Johnson Hotels? Well maybe not yet, but Bloomberg reported yesterday (November 10, 2006) that basketball Hall-of-Famer, Earvin “Magic” Johnson has just announced a $1 billion Atlanta mixed-use development with hotel, residential and retail components to revitalize three blocks of Atlanta’s midtown area. This is interesting for several reasons.
Earvin “Magic” Johnson’s $1 billion hotel mixed-use project.
OK. I was just kidding about Earvin “Magic” Johnson Hotels, but not about Magic’s $1 billion investment in hotel mixed-use called “12th and Midtown.” The retired Los Angeles Lakers basketball star who earned the name “Magic” at 15, set up a real estate development company called Canyon-Johnson Urban Funds, a joint venture with Beverly Hills-based Canyon Capital Realty Advisors, LLC.
The just-announced hotel mixed-use development at Peachtree and 12th Streets will have 1.2 million square-feet of office space, more than 500 hotel rooms and more than 600 condominiums. It will also have 150,000 square feet of retail space, according to a statement issued November 10 by Johnson and his partners, Daniel Corp. and Selig Enterprises Inc.
According to Bobby Turner, managing partner of Canyon Johnson Urban Funds, “This is a project that is going to position Midtown as a community where you can live, work and play.”
And the partners say that the retail features of the project “are akin to the much heralded Magnificent Mile in Chicago,” which is on Michigan Avenue, north of the city’s downtown.
Why is this interesting?
This is not Johnson’s first real estate endeavor. Just last month, Canyon Johnson Urban Funds announced a $120 million mixed-use project with office and housing complexes in Miami’s Little Havana area. And Canyon Johnson has been active for several years — it seeks to revive neglected urban areas with real estate investment.
It is always interesting when celebrities put their names behind something, and for me it is particularly interesting when the “something” involves hotel mixed-use. But Johnson’s involvement is just the latest in an impressively growing string of similar situations, many of which I have noted in recent blogs. They include Bill Gates and Prince Al Waleed multi-billion investment bid to buy Four Seasons, Barry Sternlicht and his “1” Hotel and Residences, Paul Allen and his Mercer Island condo hotel project, Andre Agassi and Steffi Graf with their Tamarack Resort and teaming with AOL Founder Steve Case for Agassi-Graf Tennis and Fitness Centers to be built at many of Case’s Exclusive Resorts locations, and Shaquille O’Neal and his $1 billion dollar hotel mixed-use investment with MDM Development in downtown Miami. And I suppose we should not forget Donald Trump’s many hotel mixed-use ventures — in fact The Trump Organization has seven projects underway right now, including one in the Soho area of Manhattan and a 90-story tower in Chicago which just reported that it was virtually sold out.
It is also interesting because it shows another hotel mixed-use side of the Canyon Capital — the good people who provide a lot of debt and equity financing for our industry. In fact, during calendar year 2006, Canyon Capital deployed about $400 million of senior bridge and mezzanine debt of which approximately $100 million was funded into the hospitality industry.
So now we add Earvin “Magic” Johnson to the growing list of names seriously involved in the hotel mixed-use phenomenon. Who will be next?
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