Lines are being drawn among Lake Charles City Council members over whether money should be loaned to developers interested in building along the lakefront, on the north side of the Civic Center. (Karen Wink / American Press)
Last Modified: Tuesday, May 08, 2012 4:57 PM
Lines are being drawn among Lake Charles City Council members over whether money should be loaned to developers interested
in building along the lakefront.
The Roach administration is working on the details of a “development agreement” with HRI Properties in New Orleans. Company officials have proposed constructing a $19 million, 150-room hotel on the north side of the Civic Center. An estimated $3 million is what is being discussed as what the city would loan to complete financing.
“What we have agreed to do is develop an agreement and present a proposal to the City Council for it to evaluate and decide if it’s viable,” Mayor Randy Roach said.
He said the company explained it would have difficulty financing the hotel completely.
“And it was said that it would take some city participation at some level for the project to work financially. That is what discussion has centered on,” Roach said.
City Administrator John Cardone — who is a member of the administration that has been in talks with HMI — said the company can come up with $15 million in private capital, with an additional $500,000 to $1 million from the hotel company that will allow its name to be placed on the facility.
Cardone said HMI would be interested in a “soft loan.” In the financial world, soft loans are offered below market interest rates. “It would be paid back over the duration of any lease agreement that may be reached,” he said.
The agreement would also include a clause that stipulated that the property and facility would become the city’s after the lease ended.
City Councilman Dana Jackson does not agree with the idea.
“I don’t think the city is in the lending business. Every project has to stand on it own. And I don’t think the public wants us to lend money to help open a business,” he said.
Jackson argues that money could be used for needed infrastructure improvements.
City Councilman Stuart Weatheford agrees with Jackson.
“My first inclination, I’m not real comfortable with giving them a loan.”
City officials said the money could be provided from the capital fund or capital improvement bonds (of which certain money was set aside for economic development projects).
City Councilman Marshall Simien -- who worked on a blue ribbon committee that sought a hotel in 2003 -- thinks the HRI proposal is the best he has seen.
“Most of these types of deals come together with public and private partnerships. I would be for it. The city will get a return because the hotel will jump start tourism and tax revenue.”
No date has been announced as to when the City Council will vote on any hotel deal.
Posted By: DARRELL On: 5/8/2012
Title: Focus on City needs!!!!!
The City of L.C. needs to get out of the real estate and banking business.. This has disaster written all over it.. If a a hotel developer doesn't have the money to build, then move on to something else.. Also, the city needs to just sell the north lakefront property as originally intended instead of leasing it and then dictating every little detail about the project.. This is why it takes so long to get anything done around here. The city has studied and over-regulated every little issue that comes up for Downtown and Lakefront development... They need to focus on city needs in the traditional sense and quit trying to control every little project that comes along.
Posted By: B. Linsky On: 5/8/2012
NO! The City of Lake Charles has already CONFIRMED there is a deficit for the city and now it wants to lend money to an outside entity? And part of that reality is investing with--or in a company from the New Orleans area? Let's think about this for a second, or not.
For the first time, I believe I'm in agreement with Counciman Jackson, “I don’t think the city is in the lending business. Every project has to stand on it own. And I don’t think the public wants us to lend money to help open a business." And I would add, especially to a business coming in from New Orleans where mismanagement of funds is an everyday occurrence.
By the way, if I recall it wasn't that long ago that someone said, "this project is not going to work, because big investors recognize the difference between REAL growth and POTENTIAL growth."
Posted By: Dragon On: 5/8/2012
Title: Loaning money
Oh that's smart.........someone going to put a huge portion of that money in the bank.........either develop it yourself, sell it, or level it to the ground.