Hotel Refinancing Gets Moved to 3rd Reading
YOUNGSTOWN, Ohio – Legislation to restructure repayment of Youngstown’s loan to the owners of the DoubleTree by Hilton Downtown Youngstown will move to a third reading after failing to pass at a special meeting Thursday.
Councilman Mike Ray, 4th Ward, moved that the ordinance, which council members first took up at their meeting just over two weeks ago, be considered at their meeting next week after it was clear it would not receive the six votes needed for passage as an emergency.
Only six of council’s seven members were present at the special meeting, with 2nd Ward Councilman Jimmy Hughes absent because he was in the hospital, according to council members. Councilwoman Samantha Turner, 3rd Ward, voted against suspending the rules of council to put the ordinance up for a vote.
The legislation, proposed by Mayor Jamael Tito Brown, would authorize the city’s Board of Control to restructure repayment of the $845,128 that Youngstown Stambaugh Hotel LLC now owes, which includes the original $700,000 the partnership borrowed in 2016 plus interest and penalties.
Under the new terms, the debt would accrue interest at a 25-year annual rate. The hotel owners would pay interest-only payments of $8,451.28 semiannually, July 1 and Jan.1, for the first five years, then make twice-yearly payments of $25,738.88 for 20 years.
The revised terms would mirror those made to the hotel owners’ $4.9 million loan from the Ohio Water Development Authority, which requires the city to adopt the same terms.
The partners had not made any payments on the original loan and just recently made a payment to the city based on the terms now being considered.
Turner said the city administration has allowed the hotel’s owners to miss “numerous payments” and that council members have been “more than understanding and generous in the matter.”
She added, “The state can stand to lose those dollars, but our city cannot.”
Finance Director Kyle Miasek, in response to direct questioning by Councilwoman Anita Davis, 6th Ward, reported that the hotel owners in 2019 paid back approximately $1 million they borrowed under the city’s float loan program.
Councilman Julius Oliver, 1st Ward, whose ward the hotel is located in, characterized any vote against the legislation as shortsighted.
“This hotel is currently providing jobs in the city, is currently providing tax to the city. It is an anchor that is currently attracting more business,” he said.
Even if the hotel were to fail, the city is the least on the hook in terms of what is owed, Ray said. “But we have the most at stake with the jobs, with the economic impact, with the payroll and what it does for our community,” he added.
“We also have to understand that these investors put their own money into this project as well. It’s not just loans and grants,” Oliver added.
The city had been under a Friday deadline to approve the ordinance, but Miasek said since it likely will be approved when City Council meets Wednesday, when only four votes will be required for passage, missing that specific deadline should not be an issue.
Copyright 2023 The Business Journal, Youngstown, Ohio.