JRA to get $9 million loan for hotel
The Jackson Redevelopment Authority will borrow $9 million from an investment firm to fund the city's portion of the Westin hotel project in downtown Jackson.
The city's economic development agency began looking for other options to finance its portion after there were no bids on the city bonds. The agency put out a request for proposals from investment banking companies.
JRA received five proposals and selected Siebert Brandford Shank & Co., L.L.C., which is billed as the nation’s No. 1 ranked Minority Based Enterprise municipal finance firm and a Top 5 MBE corporate underwriting firm on Wall Street.
"The project is full steam ahead as planned," said developer Joseph Simpson of Capital Hotel Associates, which is developing the project.
JRA Chairman McKinley Alexander said Siebert Brandford Shank offered the best and lowest bid to finance the project. He said the recommendation is to finance the note for 20 years.
JRA attorney Pernila "Penny" Stimley-Brown said said there was a very strong indication of interest and having five of seven companies they reached out to make a proposal verified that interest.
No one knows for sure why no bids came in on the bonds. Some point to the terms of the proposal while others have speculated that turmoil and changes at the Jackson Redevelopment Authority might be to blame.
There has been infighting among JRA board members. However, Moody's Investment downgraded the city's bond rating.
The JRA, with backing of the city of Jackson, agreed to issue the $9 million in bonds for the hotel. The state provided $20 million in bonds for Hinds County to issue for the project. The entire project has been estimated to cost about $60 million. All funding is now in place.
Legal opposition to the city of Jackson helping finance construction delayed city funding. However, the opposition was dropped earlier this year.
Local developer Don Hewitt filed a legal challenge to Jackson backing bonds for the private project, saying it was prohibited by the state constitution. A Hinds County chancery judge ruled against Hewitt this year. Hewitt then filed for reconsideration. However, he dropped his opposition.
Hinds County Supervisor Peggy Hobson Calhoun said the goal is to have the hotel in operation for the Southern Legislative Conference, scheduled for 2017 at the Jackson Convention Complex.
Original plans called for the Westin hotel to have 205 rooms and a matching number of parking spaces, which would be shared by people who park near the Valley Title building during the day and hotel guests. The development would introduce a luxury-lodging brand with worldwide recognition to the metro area.
"This hotel will have a great economic benefit to Jackson and Hinds County," Calhoun has said.
Contact Jimmie E. Gates at (601) 961-7212 or jgates@jackson.gannett.com. Follow @jgatesnews on Twitter.