Meridian plays 'White Knight' in $180m deal.

Meridian Capital Group has arranged the first mortgage construction loan for the historic renovation and restoration of the Book-Cadillac Hotel in Detroit, Michigan.

The highly complex, $180 million transaction--involving 22 layers of financing--took more than two years to assemble and required the participation of numerous public and private capital sources. The first mortgage was the final component of the capital stack and, according to Meridian Capital Group, proved to be the most difficult to obtain for The Ferchill Group, a Cleveland-based developer.

Meridian, which played the role of the "white knight" intermediary in the transaction, embarked on an extensive, nationwide marketing campaign and identified a suitable first mortgage lender for the project.

"Any qualified real estate finance professional will tell you that deals involving more than 20 layers of financing are virtually unheard of," said Meridian Capital Group senior broker Jennifer Cherney of Meridian's New York office, who consummated the transaction. "This transaction is clearly one of the most complex financing packages the market has seen in recent memory."

"Closing this deal required a tremendous amount of patience, effort and teamwork by every party involved," said Ms. Cherney. "Everyone recognized from the very beginning that finalizing this deal wasn't going to be easy, but rather something special both in terms of structure and historical significance." The Book-Cadillac Hotel is one of Detroit's most famous icons. The 33-story luxury hotel opened in 1924, then adding a dramatic presence to the Detroit skyline. At the time of construction, it was the tallest building in Detroit and the tallest hotel in the world. Designed in an elaborate Venetian style of the Italian Renaissance by renowned architect Louis Kamper, the Book-Cadillac had tremendous fanfare when it first opened. The hotel was frequented by a number of notable dignitaries including The Beatles, Elvis, Martin Luther King Jr., Frank Sinatra, Sammy Davis Jr., Katharine Hepburn and Presidents Herbert Hoover, Franklin Delano Roosevelt and John F. Kennedy, among others.

Unfortunately, the Book-Cadillac's fortunes--along with those of Detroit--declined with the onset of the Great Depression.

For the next 50 years, the property changed hands several times, with each new ambitious owner attempting to renovate and revitalize the deteriorating building.

The hotel ultimately closed its doors in 1984 when the city of Detroit decided to completely redevelop the hotel into a much smaller scale so it could turn higher profits. Most of the prospective developers who subsequently attempted to restore the property dropped out, however, citing poor economic conditions and soaring construction costs as major inhibitors.

After 22 years of waiting, Downtown Detroit's historic Book-Cadillac Hotel is set to undergo a dramatic $180 million transformation led by The Ferchill Group.

Ferchill, which specializes in renovating historic structures, plans to create a 455-room hotel known as the Westin Book-Cadillac that will also include 67 upscale condominiums on the upper floors. The four-star, full-service hotel will feature exceptional views of the downtown skyline and the Detroit River, and will include such amenities as flat-screen televisions, high-speed cable and wireless Internet access in each room and a state-of-the-art fitness center.