YOUNGSTOWN, Ohio (WKBN) – A discussion on a repayment plan proposal for the Double Tree in downtown Youngstown is being postponed after the Youngstown Finance Committee meeting was rescheduled.
The meeting, originally set to take place Monday, has been rescheduled for Wednesday at 4 p.m.
One of the topics to be discussed at the meeting is legislation to amend an agreement between the city of Youngstown and Youngstown Stambaugh Hotel, LLC.
The city provided a $2 million loan to the hotel, and by the end of 2019, just over $1 million of that had been repaid. A term loan of $700,000 was to have had 60 installments, finishing with a balloon payment at the end of 2026.
However, due to impacts from the pandemic, the hotel struggled to make payments back, not only to the city but also on its $30 million bank loans.
The Ohio Water Development Authority, an agency of the State of Ohio, has agreed to restructure its $4.9 million loan to the hotel. However, that is contingent on the hotel reaching an agreement with the city of Youngstown to restructure the city loan.
If City Council votes to approve the proposal, the loan will be restructured for a total of $845,128.00 to be paid back over the next 25 years.
The repayment plan will include a 2% interest rate. The hotel will have to make interest payments of $8,451 on January 1 and July 1 for five years, beginning July 1, 2023. Then, beginning in 2028, it will pay $25,738 twice a year, finishing in 2048.
First Ward Councilman Julius Oliver says he feels comfortable with the proposal because the hotel has already shown good faith by making a recent payment of roughly $8,000.
“We would not have moved forward with this without that payment. This made us feel comfortable, it made me feel comfortable,” Oliver said. “So payments that were not being made are being made now, even before the refinance,” he stated.”
Oliver compared it to refinancing a loan or a mortgage, stating it’s not uncommon. He says the hotel is a great benefit to the city and would hate to see the city lose it.
“This is a job generator, an income tax generator. This is what the city needs. The city has lost so much already we don’t want to lose more jobs and more taxes,” he said.
Third Ward Councilwoman Samantha Turner had an opposing view.
“We have showed a lot of grace to Marchionda and this additional ask, at this point, I feel is blatant disrespect for the city and for all the work we contributed to this project. We have, to at some point, stop throwing good money after bad, and I am all for saving a downtown business, but I am done being in agreement to save money because he is mishandling his resources,” she said.
Turner says she would like to know how the proposal will help save the business.
“The hotel has helped the downtown grow, and it continues to help the downtown grow. In some places, we’re in between a rock and a hard place, but tell us exactly how it will help you grow,” she said.
We reached out to several other council members for comment. Councilman Mike Ray and Councilwoman Basia Adamczak declined to comment at this time.
The Finance Committee will meet at 4 p.m. Wednesday, followed by a city council meeting at 5:30.