|By Felicia Kitzmiller, The News Herald,
Panama City, Fla.McClatchy-Tribune Regional News
July 06, 2011--PANAMA CITY -- County commissioners expressed cautious optimism Tuesday about the Embassy Suites Hotel and Marina proposed for downtown, but they are carefully vetting the potential effects of their role in financing the project.
Massalina Invest -- ments LLC is asking Bay County to act as a conduit for state community development block grants (CDBGs) that will be used to insure a loan from the U.S. Department of Housing and Urban Development (HUD).
T h e p r o p o s e d seven-story, 168-room Embassy Suites carries a price tag of $39 million. The investment company has $14 million in equity but is relying on local governments to put up CDBG money as collateral against a guaranteed loan from HUD.
Panama City receives an annual allotment of community development grants, and under HUD rules, up to five times the amount of their annual grant can be used as collateral against the HUD loan. However, Panama City only receives $400,000 in CDBGs annually, meaning their maximum pledge would be $2 million. The proposal was well received at Panama City's first public hearing on the topic last week.
The investment group is asking Bay County, which receives no annual CDBGs, to apply to the state for the remaining $23 million. Florida has about $100 million in qualifying equity left for the year, said Curtis Mimna, who presented the details on behalf of the developers.
If developers have trouble fulfilling their loan obligations, a portion of Panama City's and the state's CDBGs would be used to cover the difference.
Two local residents spoke in favor of the hotel during the public hearing, and commissioners seemed receptive to the plan. Commissioner Mike Thomas wanted to find out how guaranteeing the loan would affect funding for assisted living facilities, which also is applied for through the same HUD program, and Commissioner George Gainer requested an opportunity to take a closer look at the business plan for the hotel. As the conduit for this money, Gainer said it was the county's responsibility to vet the project thoroughly.
Bay County and Panama City each will hold another public hearing on the subject, after which the commissions will vote on a resolution to approve sending the application to the state.
In other business Tuesday, the commission: voted to sell a motor grader for $162,000, or 92 percent of its purchase price in 2008, to Deanco Auction & Real Estate Co. passed a resolution in support of a Forever Florida grant application for West Bay Preservation Lands between Crooked Creek and the east edge of the West Bay Sector Plan. accepted the Public Safety Coordinating Council's recommendation for the division of $153,382 in JAG grants. approved the cleanup of two properties in violation of Bay County code and placed a lien on the properties for the cost of the cleanup. approved a modification to the Tourism Development Council's Plan Ordinance to allow them to spend BP settlement money from the Deepwater Horizon disaster with approval from the TDC board and County Commission. approved the assessment of fees for a municipal service benefit unit project that paved Bear Point Drive and Cochran Avenue.
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Copyright (c) 2011, The News Herald, Panama City, Fla.
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