City to Consider Delayed Payment on DoubleTree Loan
YOUNGSTOWN, Ohio – The city is proposing to tack on $73,806 in unpaid mortgage payments to the balloon payment the owner of the DoubleTree by Hilton Youngstown Downtown will owe in December 2026.
That is according to the terms of a consent, waiver and deferment agreement with Youngstown Stambaugh Hotel LLC that the city’s Board of Control will consider at a special meeting Thursday.
The real estate partnership is delinquent on the 14 payments it was to make on a $700,000 mortgage beginning with the initial payment in December 2019 and through the January payment. The loan represents a portion of the $32 million capital stack assembled to convert the former Stambaugh Building into the DoubleTree hotel, which opened in May 2018.
The hospitality industry has been particularly hard hit during the coronavirus pandemic, which has curtailed both business and leisure travel. Restrictions to fight the pandemic also have resulted in limited hours and capacity for restaurants and bars.
A representative of Pan Brothers Associates Inc., a New York real estate company that partnered with Youngstown’s NYO Property Group to redevelop the property, did not respond to requests for comment Tuesday.
Under the terms of the mortgage agreement, which was approved in late 2016, the loan was structured over 20 years at 6.5% interest, said Kyle Miasek, the city’s interim finance director.
However, instead of being paid over 20 years, at the conclusion of a three-year period during which no interest or principal payments were required, the hotel’s owners would begin making 60 monthly payments of about $5,200, with a balloon payment of $546,000 to be paid in December 2026.
According to the agenda item, the hotel is in the process of restructuring its loans with lenders FCB Bank and Chemical Bank, now known as TCF Bank. The city’s mortgage is subordinate to the mortgages that secure the bank loans, the hotel and the banks have requested that the city consent to modification of the of the hotel senior loans and to waive any potential default on the city’s loan.
“They needed our consent and waiver,” Miasek said.
The $73,806 – the 14 missed payments plus interest and penalties – would then be added to the December 2026 balloon payment, bringing it to approximately $620,000, he said. The hotel operators also will be required to make monthly payments, as called for under the original agreement, beginning this month.
Copyright 2021 The Business Journal, Youngstown, Ohio.