HARLINGEN — Take a look inside the new company formed to borrow $32 million to build the $25-million hotel to be attached to the city’s convention center.
Harlingen Properties LLC includes four members — none from this city.
Brandon Raney and Clyde Johnson, founders of BC Lynd Hospitality, the company building the five-story, 150-room Hilton Garden Inn, are part of Provident Group- Harlingen Properties LLC, a branch of Baton Rouge, La.-based Provident Resources Group.
The group also includes members specializing in financing.
David Grand serves as vice president and associate general counsel at Provident Resources Group, while Michel Benitez is an assistant general counsel at Preston Hollow Capital, a Dallas-based municipal financing company.
On Nov. 5, Provident Group-Harlingen Properties filed as a limited liability company with the Texas Secretary of State’s office, created to borrow money to fund the hotel’s construction.
As part of an agreement, the Arizona Industrial Development Authority, an economic arm of the state of Arizona, is issuing $32 million in tax-exempt revenue bonds to Provident Group-Harlingen Properties to finance the hotel’s construction.
For 18 months, BC Lynd searched for the “right” financing plan, Raney, the company’s chief executive officer, has said.
Two days after Provident Group – Harlingen Properties filed with state of Texas, Raney described the financing plan as “not unusual,” adding the city of Irving was using similar financing to fund construction of its convention center hotel.
Until about 2060, the company will be tied to the city.
Under the agreement with Arizona, Provident will pay back the bonds within a 40-year term.
At the end of the 40 years, all revenue derived from the hotel’s operation, sale or rent will go to the city of Harlingen.
Meanwhile, the plan does not bind the city to any financial obligation, Mayor Chris Boswell has stressed.
Now, Provident Group – Harlingen Properties oversees the deal that is vital to helping BC Lynd secure the financing to build the upscale hotel to include a restaurant.
City Manager Dan Serna has called BC Lynd critical to the convention center’s success.
In late 2015, the city agreed to build the $16.7 million convention center while BC Lynd funded construction of the hotel.
Under that agreement, BC Lynd will operate, manage and staff the convention center while splitting any profits or deficits with the city.
While the convention center broke ground in August 2017, the hotel’s construction has fallen more than a year behind schedule.