Amended loan agreement ensures city will receive $38,000 in lost property taxes, hotel tentatively set to open in July
JAMESTOWN – The Jamestown City Council has approved the restructuring of a loan for the developers of the DoubleTree by Hilton.
On Monday night the city council unanimously approved the new terms of the 10-year, $350,000 Jamestown Local Development Corporation (JLDC) loan for H. H. Jamestown, LLC – a single entity subsidiary of the Hamister Group, which is renovating the former Ramada Hotel at 150th W. Fourth Street in downtown Jamestown.
City Development Director Vince DeJoy, who also serves as the director of the JLDC, explained what the new terms involve.
“Basically what has been changed is some of the repayment terms on how they would pay interest and principal back, giving them the ability to be incentivized for staying in Jamestown the entire ten years. There would be a break on the principal that is owed,” DeJoy said.
Mayor Sam Teresi – who is also the chairman of the JLDC board of directors – said the restructuring was necessary after a recent Supreme Court decision ruled that the actual assessed value of the property was too high…
“Hamister Corporation – H. H. Jamestown, LLC had challenged the assessment on the property and through a court action had the assessment reduced from $3.3 million to about $1.8 million. That is going to cost the city of Jamestown about $38,000 in tax revenue,” Teresi said following the meeting. “In exchange for modifying the terms of the loan as requested by the Hamisters, they are now going to make a voluntary $38,000 payment to the city of Jamestown to hold the city harmless on the reduction of the assessment on the property.”
DeJoy said as a result of the agreement, it’s a win-win situation for both the city and the hotel developers.
“Both the city and Hamister Group came out winners in this. We’re going to get a very good project and they’re going to get better repayment terms that will help them with their cash flow,” DeJoy said.
Because the loan was more than $100,000 the city council was required to vote on it back in 2016 when it was initially approved. The council was also required to sign off on any changes to the terms and conditions that were made.
The total cost of the hotel renovation project was initially expected to be $14 million, but DeJoy said that some unforeseen challenges have driven the cost up for the developer.
The hotel building has been vacant since 2013 when the Ramada closed. It was purchased three years later by the Hamister Group in order to renovate and convert to a DoubleTree by Hilton.
As for the status of the project, the developers are hoping the hotel will be completed and open by July 1 of this year.
CONFUSION OVER RESOLUTION LEADS TO QUESTIONS, LENGTHY DISCUSSION PRIOR TO VOTE
While the city council unanimously approved the loan, it wasn’t without some concerns and questions from the council’s newest meber. Councilman Andrew Liuzzo (R-At Large) questioned why the loan amendment was added as a “dummy resolution” under new business. Also, once it was introduced, he voiced concern that the council was expected to vote on it without any discussion or explanation.
Councilman Tony Dolce (R-Ward 2) introduced the resolution and said he had planned to briefly explain what it entailed but didn’t have the opportunity to before Liuzzo raised his concerns and questions. Dolce also said that all the information on the loan amendment was sent to the council members – including Liuzzo – last Friday via email, so they should have had enough information to know what the changes entailed prior to voting on it.
Mayor Teresi also pointed out to Liuzzo that the loan changes were discussed during the Feb. 5 city council work session, and Liuzzo himself had commended DeJoy and his staff for the work they did on renegotiating the terms of the loan.
Following about ten minutes of discussion and explanation, the resolution was voted on and passed unanimously.