As developers move forward with the Baker Hotel renovation project, the city could soon be contracting with a non-profit organization to help walk the city through the complex financing process.
The city council is scheduled tonight to consider a six-month contract with the National Development Council based in New York City to provide assistance to the city as they work with Hunter Chase to secure mixed financing from public and private sources. The council meets 6:30 p.m. at the City Hall Annex.
“It will hopefully open some doors to some of these federal programs,” City Manager Lance Howerton said. “They would be something of an advocate for the city … and another set of eyes.”
NDC would help structure the project by assisting in the sorting through the list of possible public funding sources such as grants, loans and loan guarantees for ones the project could be eligible and competitive, according to Howerton.
The organization would also provide assistance in meeting deadlines and completing the applications.
Such complex projects are the group’s expertise, Howerton said.
“Obviously this is foreign territory to us,” Howerton said.
Under the proposed agreement, the city would provide $25,000 and the Mineral Wells Chamber of Commerce and the Mineral Wells Industrial Foundation would provide an additional $2,500 each.
Howerton said the city’s understanding is that Hunter Chase is close to beginning the financing shopping process after months of planning and crunching numbers.
The city has had some interaction with the NDC several years ago when Life Rebuilders out of Phoenix looked at turning the building into senior housing, according to Howerton.
Stephanie Dugan of NDC visited the Baker Hotel then and is familiar with it, according to Howerton.
The city’s share would come from the economic development fund, a fund created in the mid-1990s when the city was gifted with the old Alco building which was then sold to PECO-Facet. The approximately $230,000 fund is restricted to economic development projects for the city, according to Howerton.
The 2008 developmental report on the Baker was paid for from the same fund, as well as other projects in the city, Howerton said.
In a letter to the mayor and city council, Steve Butcher representing the Area Growth Council briefed the council on why they are looking to bring in NDC.
“Combining the Tax Increment Financing District funding, the Historic Tax Credits, the New Markets Tax Credits, investor equity capital, construction loans, and permanent financing with potential federal grants and loan guarantees is a best tedious,” Butcher wrote. “The community has become aware of yet another potential funding mechanism that appears to greatly enhance the overall probability of success for the project.”
While the Housing and Urban Development Section 108 loan program has great potential for the project, it has never been used in Texas, Butcher stated.
NDC was contacted to obtain assistance in applying for the funding, according to Butcher.
The NDC originally developed this HUD program and is very familiar with its application,” Butcher wrote. “Additionally, they recently received a large allocation of New Markets Tax Credits … We believe that with their assistance, there is a very good possibility that permanent financing for this project can become a reality.”
Staff writer Christin Coyne can be reached at (940) 325-4465, ext. 3428 or email@example.com.