New loan for the Thompson Hotel project in preparation
Worthington Economic Development Authority staff have been contacted by Clark-Vinroot Properties with a request for $ 200,000 in revolving loan funds for their redevelopment work, deputy town administrator / development manager reported. economist Jason Brisson in a brief EDA meeting on Tuesday. Brisson explained that the developer has found between $ 50,000 and $ 75,000 in unforeseen fire safety requirements and hopes to use the remaining $ 125,000 of the loan application for storefront improvements outside the building. building.
The city and the EDA approved a Tax Increase Funding District (TIF) for Clark-Vinroot in 2020 to help fund the renovation of the Thompson Hotel, Brisson reminded EDA members. After examining the development costs, the city’s market rate for rents, and the project’s identified funding gap, it was determined that 25 years of PAYG TIF was needed to achieve a reasonable rate of return for the developer. depending on the associated risk. with the project.
“During subsequent negotiations for the project, EDA staff and the developer discussed future additional financing options, but determined that it was best to finalize the TIF district first to avoid complicating the negotiations. TIF, ”explained Brisson.
The new funding request exceeds the unallocated cash balance of the AED Revolving Loan Fund by $ 120,289.10, he added. There is a balance of $ 342,933.33 in restricted cash.
Brisson said the restricted money came with “conditions” because those funds came from an outside source (usually federal). When restricted funds are loaned and then repaid, they lose their restricted designation and the requirements for their use.
“Since the AED RFL fund currently has less than the requested amount, and the staff
prefer to lend earmarked funds over unrestricted funds, AED staff will determine if this
The project meets the requirements of its restricted RFL funds, ”said Brisson.
Additional project funding options include transferring some funds from the 2% loan program from AED to RFL, or offering a lower loan amount to the applicant, Brisson said. Since the AED RFL guidelines require job creation for every loan, the RFL guidelines should be updated to meet this demand.
Noting the alternatives available to complement the potential loan, Brisson said he wanted to assess the interest of ACN members before moving forward. The board, after a discussion of about 25 minutes, encouraged Brisson to do so.
“They have a number of interested parties who have expressed an interest,” said Member Chad Cummings, who chaired the meeting on behalf of Mayor Mike Kuhle, potential tenants of the Thompson Hotel. “It’s just about finding a way to make it work.”
Brisson said the storefront upgrades will likely come after other renovations are completed and include things like large glass windows, new signage and new lighting.
“They really want to recreate the old look… and do something a little more restorative,” he said.
ACN members highlighted the potential benefits for the downtown business district as a whole when considering granting the loan application.