Jan. 08--PEABODY -- Mayor Ted Bettencourt is still holding out hope for a destination hotel downtown, however slim that prospect is starting to become.The plan to transform Peabody Square's O'Shea building into a boutique hotel and ground-floor restaurant has been delayed for years over the ability of the would-be builder, Bandar Development, to find investors. The city has done its part, arranging a loan of $250,000, courtesy of a federal community development grant. The loan helped Bandar in buying the property for $1 million in 2013.Yet, the project remains stalled and an earlier suggestion from Bandar -- from as far back as last April -- that some other arrangement might be necessary is coming near to reality."Right now we're focused on a hotel," Bettencourt said earlier this week, describing his preference for a 30- to 40-room facility not unlike Salem's Hawthorne Hotel. He added, however, that a feasible alternative would be installing a restaurant on the bottom floor with apartments above.That would still fit in nicely with the city's ongoing plans for revitalizing the downtown, he said. "We're getting to the point where a decision has to be made."Bandar had also proposed a complementary project to the hotel across the street at the site of the Foster Street municipal parking lot. That plan, in a similar state of limbo as the hotel, would have created a parking garage with a cafe on the ground floor and residential units above the garage.Meanwhile, the mayor has been working to aid Bandar's efforts on the hotel front."I've been in touch with Dan and Hany (the Bandar brothers) regularly," he said. "They hope to still bring a boutique hotel to the downtown. I know they've been working to secure the financing."Bettencourt has courted the money people personally by pointing to downtown changes, such as the ongoing revamp of the downtown traffic patterns."We've shown investors that we're willing to put our money where our mouth is," he said, adding, "We've done a great deal of work on improving the flooding problem."Flooding is still always the first question asked, he conceded, despite the city's progress in recent years cleaning out culverts and establishing an upstream retention pond at Scouting Way. At the same time, he's careful not to claim that the flood problem has been beaten.The hotel project has taken longer than he hoped, Bettencourt admitted. As for giving it up and seeking apartments as an alternative, he says a final decision will have to be made in the next few months.If the mayor is running out of patience he's not the only one."The time has come to pull the plug on it," says city councilor Anne Manning-Martin. "It's obvious the development is having trouble." Two years have gone by with no action, she noted. "I'd like to know if the [city's] money is redeemable -- if that [hotel] plan is abandoned -- so the city can make an investment in the other properties."Specifically, Manning-Martin cites the decision to take by eminent domain the O'Shea Mansion at the other end of Main Street and the adjacent St. Paul's Church on Washington Street. The mayor has suggested the church could be transformed into a children's museum.Meanwhile, Manning-Martin wants more details on the arrangement with Bandar Corporation and whether there were deadlines the developers were required to achieve by certain calendar dates. "Have they met their obligations?"For her part, she's not ruling out the proposal to alter the Bandar plan and install apartments. "I'm always open to listening," she said.Other councilors are still more willing to wait. Tom Gould, for example, points out that raising money can be a difficult process. A businessman himself, Gould expressed sympathy for the difficulties the Bandars face in finding the cash needed.Bandar Development did not return a phone call.
