Agenda Packets - 1999/02/01 - Laserfiche WebLink

Home Browse Search

Mr. Kevin Carroll January 22, 1999 Page 4 CONCLUSION This clearly demonstrates that the hotel project will be important to the City at large, meeting needs that are not currently met by existing City facilities and resulting in significant spinoff business to benefit other economic sectors of the City. As the City is aware, a number of Developers have examined the prospect of building a hotel and banquet center on the Mermaid site, but have declined to do so because of the inability to meet project and operating costs without (i) the equity of the existing real estate and improvements to the Project; and (ii) the availability of tax increment financing proceeds to assist in financing the project costs. In other words, if a hotel banquet center is to be constructed, the cooperation of the City is needed. On behalf of my client, I recommend and request that the provisions relating to cash equity and the requirement that my client's deposit a sum of cash in addition to committing the land and the improvements to the Project be deleted. My client's will already incur substantial expense in connection with acquiring additional properties and integrating the hotel and banquet.center to the existing complex. To require them to submit to your requirement of cash equity ignores the fact that by doing so they would only dilute the equity in the Project by forcing my client to incur unnecessary financing expense in connection with borrowing and using the existing real estate and complex as collateral. Obviously, there will need to be other changes made to the revised Development Agreement relating to the Commencement Date and Completion Date of the Project. In addition, because of the significant personal commitment my client's have made to the Project, we are requesting that any reference of a personal Guaranty of the Tax Increment shortfall Guaranty be deleted. My client also recognizes the significant commitment it will make to the City with respect to the regional stormwater holding pond referenced in paragraph 3.6 of the revised Development Agreement. I will look forward to supplementing this information in any manner that you may request and trust that this response will better identify both the parties and the nature of the transaction. Since A I Chris H. Berndt CHB/smp cc: Hall, LLC John F. Seibert