[quote]Parties reach a deal, but GO Zone financing an issue[/quote]
A final, but unsigned, agreement is in place to build a long-delayed hotel across from the Jackson Convention Complex in downtown, although developers will have a narrow timeframe to sell tax-free bonds included in the project’s financing package.
“The dust is still settling on some details. We’re moving forward with (completing) that agreement,” said Porter Bingham, an adviser to the city on the hotel project.
But JRA has yet to issue about $96 million in bonds, including Gulf Opportunity Zone bonds that must be sold by Dec. 31.
Representatives of Trans-continental Realty of Dallas, the hotel’s developer, were not at Wednesday’s meeting and could not be reached.
Lucien Bourgeois, an attorney for the city, says most of the deal’s parameters, already agreed to in principle by the city and TCI, remain in place.
JRA on Wednesday approved seeking a new appraisal of land where the hotel will be located.
Based on that information, the $14.3 million the city is set to pay in a proposed lease-purchase agreement could change.
The city would buy the land then lease it to TCI with each having equal risk from the debt service shortfalls.
City spokesman Chris Mims said he wasn’t aware the deal was nearing completion. He referred questions to City Attorney Pieter Teeuwissen, who could not be reached for comment.
Since the tentative deal was announced in October, the company has remained silent about negotiations.
Wednesday’s announcement could be another step forward for the hotel, which was to have opened along with the convention complex in January 2009 but has been delayed by the recession and other factors.
The deadline for the GO Zone bonds to be sold is shrinking.
JRA typically meets on the fourth Wednesday of each month. That means developers would have just three days to sell the bonds if the matter isn’t taken up before the next regularly scheduled meeting.
But Bourgeois said he anticipates JRA calling a special meeting earlier in December to vote on the bonds. If that happens, attorneys involved in the deal said the financing could close as soon as Dec. 29.
A term sheet spelling out the deal’s provisions also would have to be taken up by JRA.
“We’re up against the wall,” Bourgeois said. “The calendar says it’s possible. We’re going to be working 24/7. There’s still a lot of negotiating to be done between now and the end of the year.”
While TCI is in line to build the hotel, securing the GO Zone bonds requires a formal request for proposals.
JRA agreed to shorten the typical request-for-proposal timeframe from 30 days to 15 days.
JRA board member John Reeves says he doesn’t expect any other developer trying to win such a complex project.
“There’s no way around it,” he said of Transcontinental. “We’re friends with TCI, whether we want to be or not.”
The authority also didn’t vote on two previous bond proposals for other projects.
JRA and Farish Street Group are finalizing an agreement in which developers would receive $8 million in GO Zone funds to finish buildout on the first block of the Farish Street Entertainment District, which is to open by next summer.
Jason Goree, a Farish Street Group partner, said he hopes something can be finalized in the first week of December to allow time to sell those bonds. If not, he said developers will turn to urban renewal bonds that don’t carry such tight deadlines.
GO Zone bonds were created to spur economic development in areas affected by hurricanes Katrina and Rita.
There was no discussion Wednesday of a $3.5 million bond issue to go toward a new headquarters and welcome center for the Jackson Convention and Visitors Bureau at Jefferson and Pascagoula streets.
Wanda Wilson, the bureau’s president and CEO, said that effort is “still in the research phase.”
City Council members last week approved measures that would allow JRA to issue bonds for the projects.
By Jeff Ayres | Clarion Ledger
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