New Water Park, LLC, a subsidiary of DRW Holdings, LLC/Convexity Properties.
New Water Park, LLC is the developer of a mixed-use building housing the Loews Hotel Chicago and the North Water Residences. The 400-room downtown luxury hotel includes a steakhouse, rooftop lounge, lobby bar and lounge, spa and 29,000 square feet of indoor and outdoor meeting space. The North Water Residences are 398 luxury residential apartments with access to all hotel amenities as well as its own 24-hour gym, concierge, dry cleaner, rooftop sky lounge and terrace with grill stations, media wall, fire pit and heated pool.
The challenges facing our client included the following:
- Financing Environment – The project commenced during a period in which real estate financing was scarce and expensive. The project cost was more than $300 million and required credit enhancements to be financeable.
- Urban Environment – Due to the density of the area, neighboring properties had certain rights to determine how construction would proceed.
- Ownership Environment – Because the building would house two different property types with, ultimately, two different owners, a complicated set of reciprocal easements, rights and covenants needed to be negotiated to govern how the building would be operated once completed.
Praised by the Chicago Tribune for its effective urban design, energy and relationship to the city, New Water Park’s project has been welcomed by the city for bucking the trend in cookie-cutter development. Perkins Coie attorneys handled all legal aspects of the successful development by directly meeting the project’s challenges:
Project Finance – The transaction was ultimately financeable because a subsidiary of Loews Hotels & Resorts entered into a purchase and sale agreement promising to purchase the hotel portion of the building once the hotel was completed. The purchase and sale agreement had to describe in detail the process of designing, constructing and then selling the hotel portion of the building, a process scheduled to be more than 24 months away. Additionally, we negotiated a more than $200 million construction loan facility provided by Bank of America.
Project Agreements – In addition to the purchase and sale agreement, we negotiated a complicated reciprocal easement agreement. We also created necessary agreements with neighboring properties for construction access.
Post-Construction Counsel – Once construction was complete in February 2015, Perkins Coie handled all aspects of the sale of the hotel portion of the building to Loews Hotels & Resorts. This included a legal division of the building into separate parcels for conveyance. At the same time, Perkins Coie advised New Water Park, LLC on refinancing the debt on the building. Perkins Coie continues its representation of New Water Park by working with the city on the building’s legal subdivision.