IDA thinking again about hotel issue
Published 12:00 am Thursday, October 24, 2002
One week after voting to indefinitely delay proceeding on the $22-million hotel planned for Constant’s Wharf, the Industrial Development Authority is taking a second look at its decision.
The IDA is holding a special meeting at noon today with one item on its agenda: The proposal to build a 150-room Hilton Garden Inn and a city-owned convention center on the banks of the Nansemond River.
The IDA is a city government agency that has partnered up with Suffolk Hotels LLC – a company formed by the Procaccianti Group and the developer, Stormont Hospitality Group LLC -to build the facility.
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In a surprise move last Friday, the IDA voted 4-3 to hold off on a decision long enough to give some authority members time to study changes to the site’s development plan and project’s financing plan.
At the time, some authority members expressed concern over plans for the IDA to provide a $2 million letter of credit – which would secured by property in Northgate and Suffolk industrial parks – to back the developer’s $6 million loan from Towne Bank.
The IDA is also setting aside $500,000 that will be used in case the hotel ran into operating problems. If the money has to be used, it would be repaid with interest, said Steve Herbert, assistant city manager.
Over the past week, IDA members with questions and concerns about the financing have been meeting with Herbert.
Both Herbert and IDA Chairman John Harrell are optimistic the project will pass today.
&uot;I think we will have a majority,&uot; said Harrell. &uot;I wouldn’t be a bit surprised if it passed 6-1 or 5-2.
&uot;Over the last week, I think a lot of things have cleared up. Some people didn’t fully understand the financing, the liability to the city and what percentage of the project would come from private funds.&uot;
Last week, the Suffolk City Council voted 6-1 to approved change to its cooperative agreement with the IDA.
The city and the developer want to set a ground-breaking date for sometime in December or January and complete the project in 13 months. Spring 2004 is the earliest the hotel would open.