Consolidated Joint Venture Preferred Equity/Capital

12 Months Ended

Dec. 31, 2014

Hotel Development [Abstract]

Hotel Development

Consolidated Joint Venture Preferred Equity/Capital

We are redeveloping the Knickerbocker Hotel through a joint venture in which we own a 95% equity interest. The joint venture raised $45 million through the sale of 3.5% preferred equity/capital under the EB-5 immigrant investor program. The purchasers receive a 3.25% current annual return, plus a 0.25% non-compounding annual return paid at redemption. Our joint venture may, at its option, redeem this preferred equity interest. If it is not redeemed within five years, the current annual return increases to 8%. The venture received $42.0 million in gross proceeds ($41.4 million net of issuance costs) during 2014 and $1.1 million was received subsequent to December 31, 2014. The remaining $1.9 million will be received as investors’ visas are approved. We used our 95% share of the proceeds to repay funds borrowed under our line of credit.