|By Nancy Sarnoff, Houston
ChronicleMcClatchy-Tribune Regional News
July 25, 2012--A developer planning to turn a historic downtown building into a luxury hotel is seeking public funding to help redevelop the property.
An affiliate of Pearl Hospitality is planning the $73 million project, which would convert the 22-story building at 806 Main into a JW Marriott hotel, according to a city document.
The Houston City Council is expected to vote Wednesday to authorize the city to submit an application to the U.S. Department of Housing and Urban Development for $7.4 million for the pro-ject. The figure represents a $1.8 million loan and a $5.6 million economic-development grant.
If the plan moves forward, the city would get the money and pass all of it to the developer, which would be expected to pay it back with interest. When the funds are repaid, the city is allowed to keep the $5.6 million portion for economic-development projects.
The city's chief development officer, Andy Icken, said downtown's Alden and Magnolia hotels were developed with similar loans. They were both repaid, he said.
For the 806 Main project, the loan amount represents about 10 percent of the total cost.
Other financial sources include $31 million of equity from the owner and $35 million in bank debt, says the city document, which is attached to a City Council meeting agenda.
The structure was built in 1910 and originally known as the Samuel F. Carter building.
The owner, who could not be reached Tuesday, estimates in the document the project will create 177 jobs, including 150 permanent jobs.
(c)2012 the Houston Chronicle
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