“”We’re in a deep recession and hotels are suffering the most of any real estate class right now.”

A report by Atlas Hospitality estimates that room revenues in California are down 21.5 percent in 2009 and that values are 50 to 80 percent lower than they were at the market’s peak from 2005 to 2007.”

Over at Victory Park, home to the W Hotel, the financing has also made a major change, and I cannot help but wonder, if hotels are a sort of real estate barometer, how are we doing in Dallas?.

P. O’B Montgomery & Company

“We are looking at doing whatever makes sense,” Phil Montgomery told me today, when asked if the residences would resume construction. “The market has clearly changed.”

Prescott’s Jud Pankey says the garage is complete and open, and construction attention will now focus on the courtyard. This month’s Architectural Digest feature on the hotel and colorful designer, Carleton Varney and his mentor, Dorothy Draper, has generated national interest in the project; Varney is coming back to Dallas in the spring to create more buzz.

If another developer were going to be engaged for this project, the most likely time would be when construction financing is being negotiated, said Pankey by email.

“Phil Montgomery introduced me to Apollo almost ten years ago, and we all try and assist each other when faced with a challenge,” wrote Pankey.

What we are doing, said Montgomery, is fairly routine.

According to sources, Al Coker is no longer handling marketing for The Stoneleigh Heritage Residences; Cynthia Pharr is handling media relations.

DD: What are you going to do with the shell?
Jud Pankey: The shell is going to stay as is. It will be ready to go again once we close a loan. The garage will be ready next week, so we have made some progress. We will then turn our attention to the courtyard.
DD: The parking garage is completed for the hotel, so will you let the shell sit?
Jud Pankey: Not sure what else we would do. Do you have any creative ideas, as I am all ears?
DD: Was the crane really costing $30K a month?
Jud Pankey: Yes—close enough.
DD: Will you build a smaller, scaled back condo perhaps?
Jud Pankey: No—does not make sense.
DD: Do you have any financing promises at this point?
Jud Pankey: We are working with a couple of lenders. They do exist!!
DD: Is this why Paulson (last week) said he is aiming the bail out funds at the banks?
Jud Pankey: Not sure what he said but the banks are trying to figure out risk between banks and customers. I think it is confusing for everyone, hence there is no confidence. The banks are trying to price risk and they have plenty of capital, but they are not being paid to lend money just to lend money just yet. Plus, the regulators need to encourage them to lend versus contract. It is an interesting time.

Who cares about my memories, click here to connect to theStoneleigh memories Contest and give us yours. Help a great hotel take a walk down Memory Lane. Comments are on, especially if you have something to say about that Mistress Tunnel… 

Caroline Summers (Real Estate, of course, even though she is no longer with Staubach) and Betty (Dave Perry-Miller) and John Crawford. Down in the ballroom we saw Nick and Kevin Jonas, though I honestly thought they were junior high kids, Claire and Dwight Emmanuelson, Angie Barrett, Don and Ana Carty, he the former AAL CEO now with Dell, also the guy who designed the joint, Transylvanian-born Adam D. Tihany (THEE best hospitality designer, think Le Cirque, Osteria del Circo, basically every top restaurant in the world), Graham King, Mark Cuban, Terrell Owens (as Sarah mentioned, and I will tattle he stayed rather late) Nicholas Varney, the jewelry designer and son of my pal Stoneleigh penthouse designer Carlton Varney, Mike Modano and Willa Ford whose home is featured in D Home, Cindy and Howard Rachofsky, Lisa and John Runyon, John is curator of the $100 million Joule art collection, and of course the fabulous Charlie Palmer, and the oil man who’s footing the bill for all this (and single), Tim Headington, number 163 on the Forbes 400 List. We also caught up with several neighbors and a few physicians. That burlesque show down in the glam PM Bar (another Todd Fiscus venture) was short, my husband reported, but this from the man who fell asleep the one time a friend took him to The Dallas Gentlemen’s Club. I hear they will be offering more Vegas-style shows from time to time in PM, which, with the beaded see-through curtains did remind me of Vegas, with a strong 1930’s Hollywood a la Fiscus twist.

1930’s — how very appropriate.

I did not receive a mailer about the proposed Convention Center last week — or if I did, I missed it. However, I do think we need this hotel and the resultant business. Property taxes, let’s face it, are never going to spiral downward I don’t care how much our property values plummet. Now we have people buying renting downtown, get my drift? Thus I’m sharing this from a reader and neighbor:

“You may have been surprised like I was this past week to receive a mailer regarding the building of a Dallas Convention Center hotel which included a request to sign a petition to demand a taxpayer vote. If this is not an issue with which you are familiar, then the mailer may well have caused you to have grave concern about the leadership of our city council and the direction they are headed with this hotel.

 A press conference was held today at City Hall which set the record straight regarding the “myths” (that’s being kind) that were stated in the mailer. Presuming that you did not hear that press conference, I ask that, before signing any petition proposed by the opponents sending the mailer, you please visit http://www.buildthehotel.com/ to learn more about this critical issue.

 Obviously this is an issue with which I am very familiar and adamantly support. Dallas desperately needs this convention center hotel. It is long overdue.

 Again, I encourage you to visit the website to learn the facts. I would also welcome your phone calls if you have questions or would like to discuss what is at stake.

 Best regards and thank you for your consideration,

 Laurie Sprouse”

But alas, Crescent Plaza Residential, L.P., has sprung to action. First they researched the problem — the water discoloration is a result of oxidation of iron in the lining of the galvanized steel piping in the building. Some level of oxidation in steel pipe is “normal and expected, but not to the degree you are experiencing” says Crescent.

And yippee, they have a solution: The pipe interiors will be flushed with a citric-base rinse approved for potable water systems. Then they will install a central water treatment system, which will treat Dallas’ higher PH level water and form a barrier against future oxidation. This has apparently been successful in similar situations across the country, and Ritz will keep on top of it monitoring the water scrupulously.

Bad news is that this process requires a two-day hot water shut off beginning September 2 to 4. I mean, you can stay in your condo, the commodes are fully function able. Just no hot water. Which means frigid showers and baths. Many residents who, like me, would rather take an Italian shower than plunge in water below 85 degrees, plan to find alternate accommodations for the two days. Or, at least, go shower with friends who have hot water.

I’m told the hotel is not affected by any of this as it is on a completely different water system. So I’m wondering how many residents might be checking into the Ritz Hotel for a couple nights.

“Major price slashing in the last week at the Palomar Residences.  They were grossly overpriced from the start and haven’t been selling, so maybe this will start the ball rolling.  Some of the more expensive condos have been cut by 30% or more, like a $1,315,000 unit that is now $880,000.  The hotel seems to be doing well and is getting very good reviews, but the developer seriously overestimated the condo prices that this location could achieve.  The current $250/sq.ft. is much more appropriate than $400.”

My question: who’s financing them?

PS: What about the condos?