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Related Adds Korean Partner for Grand Avenue

By Eric Richardson
Published: Tuesday, October 14, 2008, at 11:39AM
Scenes from City Hall Eric Richardson [Flickr]

This parking structure sits on the site that will become phase one of The Grand, featuring a Mandarin Oriental hotel, condos, retail and affordable housing.

Related Companies, developer of the $2 billion Grand Avenue Project, has added a second foreign partner to the project's financial backing. According to a Community Redevelopment Agency Board memo, Honua Group, an investment firm formed by three Korean insurance companies, will provide $100 million in capital commitments for the first phase of the project.

Earlier in 2008, Related announced a partnership with Istithmar, a sovereign fund controlled by the royal family of Dubai. Istithmar's capital commitment is the same as that of the new partners.

The project, now dubbed The Grand, has experienced multiple delays in groundbreaking. The project was last supposed to break ground in April, after Related's addition of Istithmar was approved by the government joint powers that controls the land. In late July the joint powers granted Related permission to delay the project's start until February of 2009. Additional delays will cost the developer $250,000 per month.

The three Korean companies that make up Honua Group have a combined $11.6 billion in assets. Dongbu Insurance Company Ltd. has a 40% share of the partnership, while Dongbu Life Insurance Co., Ltd. and Kumho Life Insurance Company, Ltd. each add 30%.

Phase one of The Grand includes a 46-story Mandarin Oriental Hotel & Residences with 295 hotel rooms and 266 condo units, a 19-story tower with both market-rate and affordable apartments, retail and the development of the 16-acre civic park, located one block north among County buildings.

The ownership change goes before the CRA board on Thursday. It must then be approved by the joint powers.

Update (Thursday): The CRA Board today approved the ownership change by unanimous consent with no discussion.

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