March 2017

Sun Mon Tue Wed Thu Fri Sat
      1 2 3 4
5 6 7 8 9 10 11
12 13 14 15 16 17 18
19 20 21 22 23 24 25
26 27 28 29 30 31  

« The accidental bonds | Main | Haruspicy »

Jan 18, 2010

Comments

Feed You can follow this conversation by subscribing to the comment feed for this post.

Tim

now matter which side of the debate you are on in this project, I think we all can see its an embarrasment to the mayor, city staff and city council. legally I don't know if the city can do anything about it now. This is a federal issue and may not be as simple as just revoting. The fact is they signed off on it. For supporters of the project its a good thing they did because accoring to the city manager, they were facing a midnight dead line for applying for the funds. As it stands now this project appears to be moving forward and no matter what you believe, hope for its success.

Tim

Ed I think its also an embarrasment to the media because the media is suppose to do its homework when reporting something. That could have something to do with why it hasnt been reported yet. Clearly this is well known to the News & Record. Word gets around quickly and they read the blogs too.

Tim

wow I spoke too soon. just as I typed the above message an article popped up on the news and record. LOL I guess they do read the blogs

http://www.news-record.com/content/2010/01/18/article/city_council_may_have_mistakenly_approved_bond_projects

Brandon Burgess

"...no matter what you believe, hope for its success."

--Not so fast. Andy Scott says the vote can be rescinded.

My question is why would the council consider rescinding? Were they mislead as to what they were voting for? If so, by whom and why? If not, where is the confusion coming from?

Forgive me if I'm missing something obvious but I don't understand how all of this was supposed to go down with regard to the bonds and what they can/will be used for.

Are proponents of these projects just as clueless as the council regarding protocol for utilizing these bonds?

Tim

Well it looks like Council is taking time to digest the information they received on the project. I doubt they will have the votes to take this project out. Get use to 5-4. Im also seeing that this is not just a hotel. Its a mixed-use project that will include shops, restaurants, maybe entertainment and even office space.

Ed Cone

Rescinding the 12/15 decision could get them sued by Chisholm.

That may not be the only suit in the wings, either.

Tim

So Ed what do you think of the project now since there will be other streams of revenue through leasing for office, retail, restaurants and entertainment? Did Justin from the Business Journal have this information before he went off on a rant?

Fec

Other states are engaging in this very competitive process. I contend we have played and lost. Nearly all our funds defined by the submitted former deal will be surrendered to reallocation.

Roch101

"This is a federal issue and may not be as simple as just revoting." -- Tim

No doubt.

Spag

"Rescinding the 12/15 decision could get them sued by Chisholm."

On what grounds? They have no contract with Chisholm that I am aware of.

Tim

It looks like This hotel may rival the interior of the Proximity. The interior design firm chosen for the project typically design interiors for Hyatt Regency and Ritz-Carlton hotels. Ive looked at the firm's portfolio and the downtown Marriott cant hold a candle to their work

Jim Caserta

What's the name of the design firm?

Fec

Spammy, that ship has sailed. Those bonds are theirs. They has presumably paid some of the legal costs toward securing them.

Joe Killian

It's true the paper's very thinly staffed -- like, one reporter -- on the weekends. We could all do a better job making sure there's nothing on any beat we're missing when we're the only one there.

But our beat reporters aren't ignoring things - there are simply days when they're not working, or are working all day on something else. I know I'm always open to anyone who wants to give me a call or drop me an e-mail about something they think I should be on -- and I know Amanda is too.

Tim

The interior design firm is Looney & Associates.

Fec

Undoubtedly.

Spag

Sorry folks but I have read the N.C. Statute on the ARRA bonds and I don't believe the City is bound based solely on the Notice of Intent. My reading of the Notice of Intent provisions is simply to alert the DOC that the City has some purposes for the funds that they are considering and therefore are not returning those funds for reallocation to another municipality by the State.

"(2) Any Recovery Zone Bond for which a Notice of Intent has been filed shall either be issued or have made substantial progress towards issuance no later than April 15, 2010. “Substantial progress toward issuance” means such issue of bonds has been approved by the Local Government Commission or placed on the agenda of the Local Government Commission for approval at a meeting in May, 2010."

The vote was also on December 15th and Notice must be filed with the Commerce Finance Center on or before the 15th. A vote does not constitute filing. Has there been confirmation that the DOC received it on the 15th? Otherwise, it is waived.

I do not believe that filing the Notice of Intent (which is all the City Council did on December 15th) obligates them to anyone.

Further, the resolution was specific to a hotel on "South Elm and Lee". Any change from that location would render any commitment void in my opinion.

Spag

To clarify, the statute quoted above is the second step in the process. It clearly requires a vote by the City to approve the bonds no later than May of 2010. A Notice of Intent is NOT the same thing.

Tim

According to the mayor, council and city staff it is a done deal.

Spag

Maybe they are getting bad legal advice. Keep trying Tim. How much are you getting paid?

Tim

Are you a lawyer Spag? It seems to me they are getting advice from a very qaulified city attorney.

In regards to the hotel, I briefly read through the info package and the project has a letter of intent from two major hotel chains as well as a commitment from an investment bank.

Ed Cone

I think City staff agrees with Sam that the City has more to do after the 12/15 vote, but not that the move from Lee St is in any way problematic.

Spag

Yes I am Tim, and I've dealt with the City's attorneys before.

Regarding Lee Street, it may not be a problem for the City. However, if the City was looking for an out, they could use that as the basis. More of a problem for any developer who thinks the 12/15 vote obligated the City to issue the bonds.

Fec

It looked to me as if the 12-15-09 deadline was necessary to perform reallocation prior to a stated 4-15-09 deadline. Looking at other states, it appears NC's handling of this thing is draconian.

Spag

The 12-15-2009 deadline was to declare a use for the bonds or send them back for reallocation to another municipality (the Notice of Intent). The 4-15-10 deadline is for a) the bonds to be issued; or b) a vote to issue the bonds to occur if they have not yet been issued; or c) to place the vote on the bonds on the calendar for a vote by May, 2010.

A) assumes the vote occurred and the bonds were issued before 4/15.
B) assumes the vote occurred, but the bonds haven't been issued yet before 4/15.
C) assumes no vote occurred, but one is scheduled for May of 2010.

Because this section only applies to cities that are eligible by having filed a notice by 12/15, yet still contemplates voting by the entity, there is no other reasonable interpretation other than the 12/15 deadline is NOT an obligation to issue the bonds or a vote to issue the bonds.

Tim

I thought the actual bond authorization would come from the North Carolina Local Government Commission, which will make its decision in May. Seems that city council gave its blessing for them to do so.

Fec

Spammy, you've positioned yourself into disagreement with the mayor.

Ed Cone

Mayor Knight told me he had spent quite a lot of time discussing this topic with a Raleigh lawyer who is an expert in the field.

Which does not necessarily mean Sam or City staffers who see things the differently are wrong.

As the old joke has it, one lawyer in a small town will go broke; bring in a second lawyer, and they both make money...

Spag

Fec, you are correct that the 4/15 deadline refers to a vote by the LGC, not the City. However, I don't believe that merely filing a Notice of Intent creates a binding obligation on the City to the private entities involved.

In fact the very next provision permits the City to waive its allocation at any time. So if the City were to have a vote and decide not to proceed, they could simply file a waiver with the LGC or request a new allocation for another project.

Fec

I'd agree if we weren't discussing a finite amount of available funds. It doesn't matter if the Elm Street Center deal gets funded under reallocation. This deal can't stand the light of day. Nobody is stupid enough to buy the bonds.

Fec

There will be record bond offerings to compete against. And some of them will be for renovations of existing successful businesses. Others will be for inspired projects like waterparks and even a car dealership. Those bonds are much more attractive than no hit Goldilocks and the Three Bores.

Andrew

I'm going to go out on a limb here and ask why it's such a problem for these developers to build this hotel?

If Tim above is correct and the group does indeed have letters of intent from two hotels as well as support from an investment bank, why should the city stand in the way?

I've heard the arguments about government-backed competition with private sector hotels. The Koury Corps' cries especially come to mind. But if I'm not mistaken, Koury or other similarly situated local companies had the same opportunity to submit proposals to use these bond funds and didn't.

I've heard other arguments that the bond program is one government shouldn't be doing anyway. And I'm not discounting that.

But beyond all the arguments against the bond program and this hotel, the fact remains that the program exists and funds will be allocated whether Greensboro chooses to participate or not. Some county, some city somewhere will put Greensboro's share to use if Greensboro doesn't itself.

So if the group has indeed received letters of intent from two hotels and financial backing from an investment group, why should the city stand in its way? The hotel chains apparently believe in the project enough to allow it to carry its flag. And the investment bank presumably believes in the hotel's profitability enough to back the bond debt.

Tim

You bring up good points Andrew. Ever since the finacial crisis banks have been careful about giving loans. If the bank didnt think this hotel would be profitable, I doubt they would have a letter of intent. As for brand names, It really needs to be an upscale chain. We have had the Hilton name twice downtown, we've had the Sheraton name and we already have a Marriot downtown. I think if the goal is to attract travlers willing to pay upscale prices, you need an upscale brand name. Now Ritz Carlton, Four Seasons and Omni may be to big for the Greensboro Market but I could see something like Wyndham or maybe even Hyatt Regency. They are not as prestigious as a Ritz but they still rank up there among the upscale chains.

Spag

I'm not sure this hotel is the best use of the funds, but I have to confess that I am less opposed to it than I previously was after gaining a better understanding of the type of bond being issued. However, I would prefer that the bonds never existed at all because taxpayers pay one way or another. In this case, in federal taxes.

I also believe the purpose of the federal program is being bastardized to a certain degree by a hotel that almost certainly would not be on the developers radar anytime soon without it and that I don't see a pressing need for in Greensboro, and that doesn't revitalize any brownfields, etc.

A good ol' Sarah Palin "Thanks but no thanks" would be better.

Tim

I think this a lot of minds will be at ease once they realize this wont just be a hotel and that the revenue to pay the debt won't just be coming from hotel rooms. This is a mixed-use development that will have some office space, restaurants, retail and entertainment. Also with the hotel leasing up to 200 spaces in a brand new city parking deck, that provides more revenue for the city.

Tony Wilkins

Speaking of "thanks but no thanks", High Point turned down their $7M.

Mick

I still dont get why we didnt pursue these or similar funds to help with the Aquatic Center. I am sure it is just my ignorance of the issues at hand.

Stephen

Good question, Mick...perhaps the answer is because Alston doesn't have as much to gain by building an aquatics center...

Tim

Not sure why they didnt use recovery bonds for swim center. Maybe the money couldnt be used for projects like a swim center. Also maybe the coliseum is not located in a recovery zone but when you look at the High Point Rd corridor, you think it would. But if they had done it, people would still be complaining. Some people cant except the fact that the hotel/motel tax is picking up the remaining 6 million for the swim center and not the tax payer. But there is no reason to be against the hotel project now that its been made clear that taxpayers arent liable. Its still a private venture.

Tony Wilkins

Tim: "Some people cant except the fact that the hotel/motel tax is picking up the remaining 6 million for the swim center and not the tax payer."
Spoken as a true liberal and destination decider of other folks money.
If there isn't $6M in the hotel/motel tax base, where does the money come from? Trees maybe.

Mick

I still dont like the idea of a big ol empty government project downtown. I am just not sold on the hotel deal.

The government does at times decide the destination of OPM. I get your point on the CVB funds. But I might add we (along with hundreds of other families from DC to SC) just dropped $400+ in Cary last Thursday, Friday, Saturday and Sunday. If played correctly some hotels are gonna love the GAC (hints: reasonable rates, group rates, EARLY comp breakfast, liberal check out times and maybe even a shuttle for bigger events). You guys still have no idea the POSSIBLE impact this place can have on the immediate area on swim weekends. Hint to food joints and hotels - advertise with local clubs on web sites and heat sheets (programs) and with GAC on the scoreboard and with banners. Become sponsors. It works. Now is not too early.

Tony Wilkins

Mick, maybe you haven't heard but you and I are now on the side side of the Aquatic Center, cheerleading and hoping for the best. I just hope no one objects to me wearing Speedos for the Grand Opening.

The comments to this entry are closed.