|By Richard M. Barron, News & Record,
Greensboro, N.C.McClatchy-Tribune Regional News
Jul. 8, 2009--Greensboro might sell bonds to help finance a $75 million hotel on South Elm Street, but not before the hotel's developers make a strong case that they'll make enough money to pay back the loans.
Such a project "provides its own revenue stream to pay that debt down," said Andy Scott, assistant city manager and economic developer. "The revenue stream has to be supported by a market study. It's the same thing that a bank or investors look at."
Bridget Chisholm, a Memphis businesswoman with ties to Greensboro, is assembling investors and executives to develop a 300-room full-service hotel at South Elm and Lee streets in the South Elm Street redevelopment area.
The city owns 10 acres in the blighted neighborhood that it cleaned up and plans to sell later this year to bring economic growth to the area.
Chisholm has presented a broad plan to Scott that could work as a private venture financed with public bonds, Scott said Tuesday.
The city's cost to borrow this money for the bonds is cheaper than ever, Scott said, because the federal stimulus package has offered to refund 45 percent of the interest cities pay to fund the bonds if they go to projects in so-called "Recovery Zones."
North Carolina laws still apply, however, so Chisholm's project would have to qualify through city review as any other local revenue-bond project would, Scott said.
Such partnerships are common, Scott said. For example, many cities build industrial sites through revenue bonds, then sell the sites to businesses to repay the bonds.
Such bonds are more flexible than general obligation bonds, he said. General obligation bonds require voter approval first because the city fully backs them with its assets.
The $75 million cost of the hotel could easily overwhelm the amounts of the newly discounted bonds allocated to Greensboro from the federal government, Scott said. In that event, city officials could ask the state to give it allocations not being used by other cities.
Meanwhile, a nonprofit group, Gate City Co., is working to find a private developer to build a central office complex for Guilford County Schools across South Elm from the hotel site.
Although the project is not likely to use bonds, members of Gate City are working with city and county officials to coordinate the project.
Mayor Yvonne Johnson, Guilford County commission Chairman Melvin "Skip" Alston, Chisholm, Scott and several others were scheduled to go to Washington on Tuesday to talk about the projects with congressional representatives.
The trip was canceled after some city residents complained to Gate City's parent, the Community Foundation of Greater Greensboro, about developer Roy Carroll's plan to fly the group to Washington in his private plane.
Foundation President Walker Sanders said the trip is still crucial, and he is working on a new schedule.
Scott said he will stay involved in the complex process.
"At this point there's still so many moving pieces," Scott said. "And we are just trying to move very carefully to make sure we cross our t's and dot our i's."
Contact Richard M. Barron at 373-7371 or email@example.com
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