MASON CITY — City officials in Mason City announced late Tuesday morning that financing had been secured for the hotel that’s a key part of the city’s downtown redevelopment project, but state officials say it will be at least another month and not later this week that final approval would be considered for the project as part of the Iowa Reinvestment Act program.
The city’s Director of Development Services Steven Van Steenhuyse in a letter to officials at the Iowa Economic Development Authority says that the hotel plan developed by G8 Development of San Diego California has been received by an investment group that includes: the firm Thomas USAF of Atlanta Georgia, an investor in USDA-backed loans with a track record of financing hotel projects; Lantern Capital Advisors of Atlanta, a development consultant; and Byline Bank of Indianapolis.
A letter from Michael Callas, the vice president of Byline Bank, states that they are underwriting the project, and have executed a letter of intent with the lender for a $10 million loan to be guaranteed 70-percent by the USDA’s Business and Industry loan program. Callas says he expects to execute a commitment letter and move to closing the financing by June 30th.
Mayor Bill Schickel says the project will most likely not be on Friday’s IEDA Board agenda because the state wants to see the underwriting by Byline Bank completed before granting final approval. “We had a very good conference call with our partners at the state today (Tuesday) along with our staff here. You know, we’re about 80-percent there, but they want us over the finish line…and we have contingent approval, but they want us over the finish line before we receive final approval, so we probably won’t be on the agenda on Friday.”
Schickel says he’s confident this final hurdle with the hotel’s financing can be met. “I think that the progress we’ve made in the last 30 days, where we have a letter of intent, where we’ve had a site visit, where the underwriting process is underway, the USDA guaranteed the previous loan by G8. All of those things point to me to successful conclusion.”
The hotel is a key component of the River City Renaissance project, which requires a significant private investment. The development includes the construction of a hotel in the southeastern part of the main Southbridge Mall parking lot, the addition of a convention center complex to Music Man Square, a skywalk connecting the hotel to Music Man Square, a new ice arena and multi-purpose center in Southbridge Mall where the old JC Penney location is, as well as a performing arts pavilion on the north side of Southbridge Mall.