MASON CITY – The River City Renaissance group today claims that the downtown project is closer than ever to actually happening and hotel-builder G8 will likely get millions in private financing needed to get the project off the ground.
According to a statement from the River City Renaissance group:
We are more confident than ever that private financing for the Downtown Hotel will be secured. Philip Chodur of G8 Development has progressed beyond a mere offer of terms with an investment group that would serve as the project’s senior lender. This past Monday, Mr. Chodur came to Mason City and brought his investment team with him: a vice-president of business development for a bank headquartered in Chicago with the servicing branch in Indianapolis; the president of a corporate financial consulting firm; and the president/CEO of the loan origination and underwriting division of an investment firm, with a track record of closing USDA-guaranteed loans, including loans for hotels. We had a very productive meeting with these gentlemen, and their interest in Mason City, the Downtown Hotel, and the River City Renaissance projects was palpable. These entities have an ongoing relationship with G8 and assured us of their trust in Mr. Chodur and his company. Since this is still in process, I am not at liberty to state the names of these institutions, but we will be able to share that with you before May 18.
The other major development this week was City approval of the concept plan. Since a query regarding that was part of your email yesterday, I will discuss this in more detail below. The good news from this is that G8 now has a solid plan that that they can show to lenders and investors. A copy is attached.
The other City contingencies are either completed, or will be at the City Council meeting on May 15. Before I get to them, I want to respond to the bullet points in your 5/3 email:
• Did the city receive the concept plan on April 30th and was it received and reviewed with comment by the Development Review Committee May 1st? Yes. The plan included the information required by the City Code and was considered by the Development Review Committee (DRC) on May 1. The DRC found that the Concept Plan is in general compliance with City Code, and provided guidance to the consulting engineer (WHKS, Inc.) towards completing the final major site plan. The City’s review process does not require further review or approval from the Planning & Zoning Commission or the City Council, so final major site plan review by the DRC is expected very soon after the final plan is submitted.
• What is the nature of the conversations with city and bank are going on? Is the City considering a guaranty of financing for the developer? There may have been a misunderstanding or some confusion during the discussion we had in Des Moines in February regarding the City’s role in funding or guaranteeing financing for the Reinvestment District projects. The City is not working independently with a bank, and there is no intention to provide a guaranty to the hotel developer. Resulting from the successful November 2017 referendum, the City has authority to sell approximately $21 million in general obligation bonds to finance these projects. None of this funding will be directed to the Downtown Hotel; it will be used for construction of the Music Man Square Convention Center/Meredith Willson Museum, the Performing Arts Pavilion, and the South Delaware Avenue Skywalk. The Downtown Hotel project is funded from three sources: a donation of City-owned land that has an appraised market value of $401,128; a $3.7 million “mezzanine” or “bridge” loan to G8 from the City, which G8 will pay back with interest over 20 years; and the developer’s investment of approximately $13 million, for which he is securing financing. G8 has provided the City with a Promissory Note and a Loan Guaranty for the City’s $3.7 million loan. We expect that the remainder of G8’s financing will be backed by a USDA loan guaranty. I hope this clears up any confusion regarding City funding or a City guaranty, but if I am off the mark, please let me know so that we can get you the information you are looking for.
• What has been the conversation between G8/Chodur and the local bank? Does that bank have all they need for underwriting? G8 has submitted paperwork for financing to the local bank and has been working directly with the bank’s vice president regarding their requirements. As you may recall, G8 was able to secure financing from Live Oak Bank for the hotel originally planned for the City Hall parking lot site, but this occurred after the deadline in the agreement between the City and G8 for that project. Upon Mr. Chodur’s request, Live Oak Bank has agreed to share its loan and underwriting decision documents (with proprietary information redacted) with the local bank (or any other lender identified by G8 that requests them). This information should be very helpful to a lender/investor when considering financing the revised project, as the proposed hotel is very similar to the one that Live Oak was willing to finance. As of this writing, I do not know of any further action on part of the local bank. However, G8’s attorney assures me that while they are very willing to work with the local bank, they are much further along on the review and approval process with the financial entities that I mentioned above. Based on this, it’s more likely that the Indianapolis bank and its investment partners will be the senior lender for this project. If the local bank would like to join in the partnership, G8 is quite willing to consider including them.
• Did the resolution between City and Foundation get finalized at the May 1st meeting? Was the public hearing scheduled for May 15th? When will the Development Agreement be fully executed and recorded? The Amended and Restated Development Agreement between the City and the Mason City Foundation has been executed by the Foundation. The Agreement is currently with our attorneys for final review, however, staff has already approved it as to form. On May 1, the Council approved a resolution setting the public hearing on this Agreement on May 15. It will be approved that night and executed the next morning. The Memorandum of Agreement, which is an exhibit of the Agreement, will be recorded shortly thereafter. We will be able to report to the Board on the 18th that this contingency has been met.
• Could you send us a copy of the DOT approval connected to the Skywalk? Our engineering consultant, WHKS, Inc., has applied for approval of the South Delaware Avenue Skyway from the IDOT Office of Bridges and Structures (OBS). A prior requirement of this submittal is consultation with the IDOT District Engineer. WHKS has met with the District 2 Engineer and Planner, who have approved the skyway concept, consequently, WHKS has filed the formal application to the OBS. As of this writing, we do not have written notice of IDOT approval; however, I was advised earlier today that WHKS has held their a with the OBS in Ames and that a formal approval is forthcoming. According to WHKS, there are some dimensional and structural details to be concluded, but the OBS does not object to the skyway location. We are assured that formal IDOT approval is imminent.
And on to the contingencies:
- By May 18, 2018, submit to IEDA documentation that acceptable construction financing has been secured for the Downtown Hotel. As noted above, we believe that the investor group Philip Chodur brought to Mason City on Monday will be the senior lender for this project. They are aware of the contingencies and we expect to be able to provide acceptable documentation by the 18th.
- By May 18, 2018, submit to IEDA a copy of the fully executed Purchase, Sale and Development Agreement between the Mason City Foundation and City of Mason City for the development of the Music Man Square Conference Center and Meredith Willson Museum. Also as noted above, we have an Amended and Restated Development Agreement that has been executed by the Mason City Foundation. The Agreement will be approved by the City Council on May 15 and executed by the Mayor and City Clerk the next day. We will meet this contingency. I am also happy to report that G8 and the Foundation have a Memorandum of Understanding for operation and management of the hotel and convention center. They are committed to work together to see this project to completion.
- By December 31, 2018, submit to IEDA a copy of the fully executed performance and payment bond for the Downtown Hotel and documentation that financing for the hotel project has closed. With our expectation that financing will be secured by 5/18, we are confident that this contingency will be met by the specified deadline.
- By December 31, 2018, submit to IEDA documentation that construction of the South Delaware Avenue Skyway has started. The status of the South Delaware Skyway is also described above. We intend to have design and bidding completed this summer and expect to begin construction in the fall.
- By December 31, 2018, submit documentation that construction financing has closed, and lease agreements have been executed for the Sports/ Entertainment/Retail Complex. Our attorneys are working on the required lease and other documents, and we are confident that we will meet the 12/31 deadline.
33 thoughts on “River City Renaissance group today claims project is closer than ever to actually happening, G8 will likely get millions in private financing needed”
Sorry folks it’s taking awhile to complete – we have to make sure everyone involved gets their fair share of the bribes just like in the obama Iranian deal – heard the old dicktater over there is going to list the people that handled that deal and how much he paid each one in bribe money from the plane load of 1.5 billion in cash obama sent over there – by the way read an article yesterday that both of obamas daughters ? are driving new FERRARI automobiles ? $$$$$$$$
Level it all and bring back the mom and pop stores on the new Federal Ave!
For all of you that believe this is all on the up and up, read and remember that someone told you so:
All smoke and mirrors! We’ll see how the taxpayers really feel when the truth comes out down the road. And it will!!! Ask yourself one important question: Have the taxpayers of Mason City EVER been lied to or mislead about ANYTHING regarding this whole project since the beginning of the mall?
If you want to see the future…..research the past! It’s as clear (and predictable) as the sun rising and setting each day. Mason City needs some serious changes if it wants to be successful….starting with leadership and it’s loyal sponges!
This article should have been posted in the whiner’s den.
I wonder what excuses or blame game will be played by the “yes” voters when the truth comes out in the future!
Don’t blame this on the “yes” voters, if the majority of the citizens did not want this project then maybe more then 10% of the voters should have showed up at the polls. The problem with Mason City politics is the lack of voter turn out, not the yes crowd.
Yes voters = lizard people!
Not Voting = Dumbass People
Did you vote yes?
Nope but I voted, I cared enough to try and put a stop to this nonsense at the polls.
If their were more people that took the time to vote instead of just sitting on their butt complaining maybe we would not be in this situation. How about you?
So Anonymous,
I take it your lack of response means you did not take the time to cast a vote on the issue?
Sadly, I hope this doesn’t turn out like Southbridge did and Northbridge, too. The deal gets done and then years later when the failure is clear to everyone, all the “players” involved are gone. I’m hoping if the project happens, it is a huge success that the taxpayers aren’t sorry they supported. Once ground is broken, just support the project and shop local, so as to stave off disaster. But – never forget the names of those involved, so in 10 years we can reflect on who caused the success or failure to happen.
Time will tell….. on who’s really being “transparent” and “honest”.
Will these ” proposed taxes” on said “donated land” be paid just like the present mall owner is and has been paying his taxes? Too many broken promises over the years! History will repeat itself! In many ways….it already has!
The taxes are being paid in full, buddy. Tax liabilities are not dismiss-able. EVER. The city, county, and schools are still getting the property tax money for the mall whether the property owner pays it or not. You need to research what happens to delinquent tax bills (hint: their not speculative proceeds like a unsecured loan, they are liabilities which are ALWAYS paid one way or another).
a donation of “city owned” land will be given. Doesn’t “city owned” also mean “taxpayer owned?” ….or paid for by “taxpayers” and just given away by the righteous and honest leaders of the community without the permission or vote of the taxpaying citizens of M.C. Bend over and grab you ankles taxpayers……. it continues.
There was a vote in November and it passed with over 74% of the voters approval.
That would be 74% of less than 10% of the registered voters. Hardly a mandate!
it was an overwhelming mandate, some would say a landslide, by the citizens who cared enough about this project to take the time to vote. The 90% of the citizens that do not care enough about the project to take the time to vote must not be concerned about this project. Everybody had a chance to cast a vote and how you chose to use that vote was up to each individual, 74% of the people that voted chose yes… What else can you do in a democracy? You can’t make people vote. It’s the way our system works and what is great about America.
Yeah those yes voters were duped into voting. Are you one of them? They were told by some council members it was a done deal, yes vote campaign, it will help the mall. Where are the yes voters now that the mall is crumbly?
So land which the city owns and thereby the land contributes nothing in the way of property taxes. This land is being gifted to a private enterprise who will pay hundreds of thousands of dollars in property tax on said land?!?! PLUS the city become eligible for $10M new state funds by leveraging the private development?!?!?
What sort of dullard would ever say ‘no’ to this kind of deal?!?!?
Those ” righteous and honest leaders of the community” don’t need to have your permission or a vote of the taxpaying citizens of MC to give away this property. Those ” righteous and honest leaders of the community” have every right to do what they have done. The voting public conveyed such powers unto the council members by electing them to office.
True….But there also happened to be a public vote on this very measure and it passed OVERWHELMINGLY. It was a bigger majority in favor than the time Josh Masson beat Max Weaver in a city council election (and that was a pretty sound beat down).
There was a vote in November on this project. The leaders of MC have done nothing wrong. You gave them permission when over 74% majority of the voters approved the project. That is why they call it democracy, everyone has a vote and it was up to you how (or If) you use that vote. The people of MC have spoken at the polls.
Did the voters also approve forgiving the “back taxes” by the present mall owner too? How much HASN’T been paid yet? Just because it’s taxable doesn’t mean you’re going to get it. Just sayin’….
The ‘back taxes’ absolutely have not been forgiven. Tax liabilites are not dismiss-able. Ever. The city, county, and school district still get 100% of the property tax money (plus fees and interest) whether a property owner pays or not (you need to research what happens to delinquent tax bills and tax auctions – its not like unsecured debt where there is a chance it goes unpaid – tax liabilities are always paid no matter what).
No taxes have been forgiven, if the mall owner fails to pay then the mall will be sold cover the taxes and the new owner will be responsible for paying the taxes on the mall.
I will beleave it when I see it and I do not think I will see it
All smoke and mirrors! We’ll see how the taxpayers really feel when the truth comes out down the road. And it will!!! Ask yourself one important question: Have the taxpayers of Mason City EVER been lied to or mislead about ANYTHING regarding this whole project since the beginning of the mall?
If you want to see the future…..research the past! It’s as clear (and predictable) as the sun rising and setting each day. Mason City needs some serious changes if it wants to be successful….starting with leadership and it’s loyal sponges!
You are obviously older and have witnessed many leadership snafu’s over the years that have cost the taxpayers dearly! I also believe that history tends to repeat itself in “little chicago” as M.C. was labeled years ago!
Sounds like this group has all their ducks in a row and has no problem answering question & concerns from the citizens. Very impressive.
What happens when other hotels lower their prices to push this new hotel into a bidding war, knowing that this new hotel has minimal retail sales levels to hit for the state loans repayment.??
a donation of City-owned land that has a market value of $401,128; a $3.7 million “mezzanine” or “bridge” loan to G8 from the City,
CITY DONATED-LOAN FROM THE CITY. IT ALL STARTS HERE.