The City Council will soon vote on a development agreement for the River City Renaissance project. The agreements are complex, but once you get into the specifics, you quickly realize the Gatehouse agreement comes with several risks. The G8 Development agreement eliminates many of those risks to the city. Here are some points to consider:
1. G8 Development’s proposal will pay principal/interest payments annually throughout the loan term. With this, the city’s risk is lowered by 5 percent each year. With the Gatehouse proposal, the city has a 100 percent risk to the end of the 20-year loan term.
2. Everyone wants the project to succeed, however, if for any reason the developer wants to walk away from the project at the nine-month mark, they can. With Gatehouse’s proposal, they keep up to $750,000 received by the city with no expectation for repayment. G8 Development’s proposal will return all paid upfront money back to the city. The G8 proposal is much less risky to the citizens.
3. If G8 Development is selected, they will drop the lawsuit against both the city and the MC Chamber. No matter what the outcome of the lawsuit would be, dropping the lawsuit will unencumber the city (and chamber) of a messy lawsuit, attorney fees and potential liabilities from either a settlement or court order. All things equal, this alone is worthy of consideration for awarding to G8.
On top of that, the G8 Development proposal will have our local HPI Partners, LLC, as the manager of the new hotel. HPI has proven to be very successful in managing The Historic Park Inn Hotel.
Please contact your City Council representative soon urging them to vote on a plan that is fiscally sound for our citizens and one that eliminates as many risks as possible.
Gary J. Schmit, Mason City