City to Consider Additional Deferment on Hotel Loan Payments
YOUNGSTOWN, Ohio – The city’s Board of Control will consider deferring an additional nine payments missed by the owners of the DoubleTree by Hilton Youngtown Downtown hotel until the end of the loan in 2026.
According to the agenda for the BOC meeting Wednesday, Youngstown Stambaugh Hotel LLC is delinquent on 23 payments totaling $121,985.08 for the $700,000 term loan the city extended to the developer in 2016.
If approved, the total of the missed payments, including interest payments and late fees, would be added to the balloon payment due at the end of the loan in December 2026.
The agenda item states Youngstown Stambaugh’s senior lender “has agreed to forbear from enforcing its rights and remedies under the senior loan documents” until Dec. 3, 2022, in exchange for its compliance with “certain conditions.”
The city’s mortgage on the property is subordinate to the mortgages that secure the bank loans.
“As a result, the hotel and the banks have asked that the [c]ity consent to the modification of their senior loans and to waive any potential default on the [c]ity’s loan that the [c]ity could use to otherwise foreclose on its mortgage, which would then trigger a default on the bank mortgages and throw the hotel, the banks and the [c]ity into court,” city officials continued in the agenda item.
In February, the board – made up of Mayor Jamael Tito Brown, Law Director Jeff Limbian and Finance Director Kyle Miasek – deferred payment of 14 missed payments starting in December 2019 totaling $73,806.09, plus interest and late fees, to the end of the loan.
City officials in February blamed the COVID-19 pandemic and resulting business shutdowns and capacity restrictions, which severely affected the hospitality industry, for the reduction in business that put the hotel operator behind on payments.
They did not provide an explanation at the time for the delinquencies before the pandemic.
Copyright 2022 The Business Journal, Youngstown, Ohio.