ILGP Borrower Success Story: The Dimond Center Hotel LLC

Date of Commitment: 2001
Type of Service: Loan Guarantee
Lender: Wells Fargo Bank
Borrower: The Dimond Center Hotel LLC
Project: Construction of the Dimond Center Hotel
Financing Amount: $8,326,000
Location: Anchorage, Alaska

The Dimond Center Hotel LLC was initially a partnership between the Seldovia Native Association, Inc. and the Dimond Center Mall, which has since been bought out. Seldovia Native Association secured funding for Anchorage’s Dimond Center Hotel through Wells Fargo Bank and Alaska Industrial Development and Export Authority using a loan guarantee, which was administered by the Bureau of Indian Affairs at that time. The financing enabled the tribe to construct a hotel and created several fulltime and part-time jobs.

Billed as Anchorage’s most sophisticated hotel, the future of the Dimond Center Hotel project was in doubt in late 2001, when financing options were drying up and hope was fading about whether or not the project would get funded. At risk was more than $250,000 of development costs and a big dream with a potentially big payoff for the Alaska Natives of Seldovia.

Freedom from the major chains came at a price; banks were not enthusiastic about a Seldovia Native Association-managed stand-alone project. “Without the [loan] guarantee we could not have been approved by any bank to fund an unproven Native corporation with a grand out-of-the-box idea; we could not have come by the financing conventionally,” the former CEO of the Seldovia Native Association said.