By TED CARTER
A failure to find a buyer for $9 million in bonds for construction of a downtown Westin Hotel is expected to force the Jackson Redevelopment Authority to ask the City Council to make the bonds more attractive to investors.
The $9 million loan to the Westin developer is the JRA’s contribution to a financing package that also includes a $20 million loan from the Hinds County Board of Supervisors. The remainder of the $60 million project cost is from private investors and a bank loan that would have a first lien on the 204-room hotel that broke ground in late summer at the site of the former Mississippi Valley Title building, 315 Tombigbee St.
The public will have an additional $7 million stake in the project through sales tax rebates generated through tax increment financing.
The Hinds County bonds were sold as part of the State of Mississippi’s $180 million bond bill two years ago.
JRA attorney Penny Brown told the Authority board last week that an Oct. 9 deadline for responses to a request for proposals on the bond expired without a response from prospective buyers. At one point, the JRA added an addendum to the request for proposals in hopes of making the bond issue more attractive to investors. “We may have to go back to the City Council for another contribution agreement if we want to find a buyer,” Brown said.
The snag in selling the bonds is not expect to slow progress hotel scheduled for completion by January 2017, said Joseph Simpson, a partner in the project under taken by Capital Hotel Associates.
Simpson said his lawyer has told him the JRA sought to lock-in interest on the $9 million bond issue for seven years and investors wanted five years.
Redoing the bond offer won’t “change the scope or the numbers” relating to the hotel, he said.
Meanwhile, a review committee created to recommend a developer for a downtown Jackson convention center hotel failed to meet an Oct. 29 deadline for announcing its selection from among proposals submitted by Engineering Design Technologies of Washington, D.C., and Red Leaf Development of Herndon, Va.
The review panel spent its first couple of meetings assigning weights to specific elements of each proposal. A third meeting failed to gain a quorum. The committee met a week later but did not feel prepared to make a selection.
The panel did decide to hire a consultant to assess the branding, or hotel flags, the developers proposed. Red Leaf is proposing a Sheraton or Crowne Plaza and Design Engineering Technologies a Marriott.