|By Ali Helgoth And Felicia Kitsmiller,
The News Herald, Panama City, Fla.McClatchy-Tribune Regional News
Aug. 21, 2011--PANAMA CITY -- To qualify for the $25.3 million in loan guarantees they requested, developers of the proposed downtown hotel and marina must convince the state's Department of Community Affairs (DCA) the 650 green jobs associated with the project are viable.
It could be a hard sell.
Massalina Investments and its principals, Lacy Curry, Joel Cowan and Joel Cowan Jr., have asked the city and county to pledge their support for about $25.3 million in loan guarantees through the federal Housing and Urban Development's (HUD) Section 108 Loan Guarantee program. The money would be used to finance a $39.5 million Embassy Suites hotel and marina downtown fronting Massalina Bayou. The project also must receive state approval.
During a meeting Friday, city and county officials were skeptical about supporting the plan and a DCA representative said the application is unlikely to be approved in its current form. The green jobs portion is one reason why.
To qualify for the Section 108 loan guarantee program, Massalina Investments must create one job for every $35,000 made available. For the proposed downtown hotel and marina project, that means 723 full-time permanent jobs would have to be created.
Estimates indicate the hotel and marina alone would create 100 jobs, so to reach the required number of jobs created, the developers proposed Institute-Panama City, a nonprofit organization to be located in the hotel that would train an estimated 650 people over three to four years to work in green energy fields.
Patrick Howard of DCA said during a presentation to Panama City and Bay County officials Friday the developers would have to justify why the nonprofit would need to be located in the hotel for the project to be approved as proposed.
That could be complicated because Bay County already has a system for training workers for green jobs. Since 2009 Gulf Coast State College (GCSC) has trained 200 students through its green energy program, said Antonio Adessi of the college. The similarities between the GCSC program and the institute's proposed training would create a duplication of services, Adessi said, and he has asked representatives from the college to contact the developers and learn more about their green energy plan and possibly propose a partnership.
Howard said DCA and HUD "initially do not see 650 green jobs as a viable part of the hotel project."
Without the green jobs, the amount developers requested would be equal to $253,316 per job. If just the jobs directly related to the hotel and marina are taken into account, the developers would be eligible for up to $3.49 million in loan guarantees.
Developers would have to further convince DCA that the green jobs could be created.
Whether the developers are able to meet the job creation goal comes down to a "crap shoot," said Pat Muth, owner of Muth & Sons Plumbing, who has installed residential solar hot water and photovoltaic systems since he graduated from the Florida Solar Energy Center in 1980.
Nearly half of the proposed jobs, 298, are associated with solar energy. Muth is one of a few solar energy installers in Northwest Florida and before the economy nosedived in 2008 he said he could barely keep his phone on the hook because demand for his services was so high. But now, the phone still is ringing and people are asking questions, but the number of purchases has declined sharply because of the steep, upfront cost of installing a solar system, which ranges from $7,000 to $21,000, he said.
Muth is a supporter of the hotel project and an even bigger supporter of solar energy. Likening the systems to "buying a mini power plant," he said he anticipates a time when "everyone will be totally self-sustained with solar."
He doesn't see that happening in the near future, though. He expects it will take more government incentives and available credit to get people to change to solar energy.
Adessi agreed with Muth's assessment. He applauded the goals of the institute but questioned its immediate feasibility.
"I wish there was more demand, honestly," he said.
In the next five years, 9,000 new jobs in alternative energy are expected to be created in Florida, but the majority of those jobs are expected to be in South Florida and the larger markets first, Adessi said.
About 50 percent to 80 percent of the students who come through Adessi's program also aren't in search of "new jobs," he said. They are primarily people who are employed in construction or engineering and are enhancing their skills to prevent being obsolete when the green energy boom comes along.
Muth and his sons graduated from the program.
He has no question that the estimated 650 graduates of the program would be able to find employment in the green energy field, but he's not sure that employment will be in the Bay County area. "This economy won't support it," he said of Northwest Florida.
Curtis Mimna, a consultant on the project, said the job creation through the program can extend into Northwest Florida. He is optimistic about demand and the local market's ability to support the projected job growth. He also said he's not concerned the program wouldn't be able to meet the target of training more than 200 per year as long as a best effort is made to meet the goal.
HUD guidelines, however, require the job creation to be in Bay County, said Michael Johnson, the director of the city's Community Development department.
Just like the city and county would share in the financial risk of the hotel, the governments would share in the risk of creating the permanent, full-time jobs, he said.
"We, the city and the county, would have to certify those jobs have been created," he said.
Not creating an adequate number of jobs would be considered a deficiency rather than a default, Johnson said.
During Friday's presentation, Howard said if the jobs aren't created, HUD can issue "sanctions and remedies, which can reduce future CDBG (Community Development Block Grant) allocations to the state and local government."
Exactly what those are, though, isn't clear. Howard said the rules are intentionally vague because each project is different.
Curry, who is managing partner for Massalina Investments, said it has not yet been decided what company would be in charge of the training program, but "major players" are involved in negotiations.
He said he doesn't anticipate selecting a company until the city and county give their support to the project.
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Copyright (c) 2011, The News Herald, Panama City, Fla.
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