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State Backed Hotel to Miss More Payments

Updated: Wednesday, July 16 2014, 03:21 PM EDT

The state-backed Chesapeake Hyatt Hotel will make a partial payment on interest owed to bondholders, the second time since 2013 the property has come up short in paying off the $150,000,000 million in debt used to build it.

In a notice released Tuesday, trustees for the property said it had entered a forbearance agreement and would be making a partial payment to bondholders of roughly $1.4 million.

The property was built under the auspices of the MEDCO, a state backed quasi- public development agency which borrowed the money to finance the project in Cambridge, Maryland.

But the property has struggled to make bond payments since it opened, and has hired a consultant to devise a plan to work with bondholders.

The Hyatt is the second MEDCO project to fall on hard times.  The Rocky Gap Hotel Resort also failed to meet projections until the state granted the facility a casino license and subsequently sold the property to private investors.

--Stephen Janis

State Backed Hotel to Miss More Payments

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