WTF Happened?

Fourteen months ago, the W Hotel was the hottest property in the city. Today it has filed for bankruptcy protection.

Even with the Prudential loan, however, Sawyer needed still more money. So in 2009, it appealed to the city for help. Boston had recently set aside money from a $69 million federal grant to fund development projects in the city that would generate jobs. Of the $11.4 million the city has so far doled out from the fund, $10.5 million went to the W. Critics questioned the wisdom of the loan — asking why the city was putting millions into the pockets of a rich developer building in a risky part of town.

Evelyn Friedman, head of the city’s Department of Neighborhood Development, defends the loan, citing the 200 or so jobs the hotel has created, and insisting that the city drove a hard bargain by demanding additional collateral. Perhaps that’s so, but if Prudential succeeds in foreclosing on the hotel, the corporate giant stands to get paid first — potentially making much of the city’s loan worthless. One prominent developer, who spoke on condition of anonymity, shakes his head. “The Sawyer family held a gun to the mayor’s head and said, We can’t open the building unless you give us $10 million,” he says. “That’s a drop in the bucket on a project of this size. That should have been a big warning sign the project was in trouble.”

Back in the bankruptcy courtroom, Kevin Ahearn, the man in charge of marketing the W condominiums, takes the stand. The hotel’s troubles won’t last, he insists, testifying that despite the economy, both sales volume and prices are poised to increase and rescue the project. “In my opinion,” he says, “it’s probably about to enter the best period of time for development that I’ve ever seen.”

WHEN AHEARN LOOKS DOWN on his city from the 20th floor of the W residences, he sees it scattered with his successes. He’s sold some of the city’s biggest luxury buildings, including Trinity Place, the Belvedere, the InterContinental, and Battery Wharf.

Today he’s showing off the W’s new marketing plan. Lacking the funds for extravagant salesmanship, Ahearn has invited seven of Boston’s hottest interior designers to do units at their own expense to showcase their work. He leads the way past a “bachelor pad” designed by Ally Coulter with Venetian plaster that looks like black alligator skin on the walls, and into a minimalist retreat with Buddha sculptures designed by Meichi Peng.

Though he doesn’t say so, it was a smart strategy for a hotel that has struggled to connect in Boston to reach out to local designers with client lists of wealthy tastemakers. As for the small size of the units, the layout was deliberate, Ahearn claims, spreading out blueprints on the table. “The one thing you can’t get in Boston is a one-bedroom with a view. The other is a small three-bedroom. So we chose to go this direction.”