SIOUX CITY -- Developers planning to renovate the Warrior Hotel and Davidson Building have asked the city to guarantee approximately $16 million in historic tax credits for the $65 million project.
The guarantees, if approved by the City Council, would raise the city's total financial commitment to the downtown project to around $30 million.
Backers say the historic tax credit guarantees would serve as a stopgap until the project receives the actual anticipated tax credit award from the state. In the interim, the guarantees will help the project secure a bridge loan in time to meet a state-imposed deadline to provide proof of construction financing.
City officials say through discussions with the developers and the state, they believe such an agreement poses minimal risk to the city, as the project will likely rate highly on its application.
"There's a risk, but we've been visiting with the (Iowa Economic Development Authority) and we're reasonably comfortable that the project will score very high based on their scoring criteria," Mayor Bob Scott said.
Scott said with the timing of the city's process and the timetable for the tax credit award, the city should reasonably know whether the project qualifies for the credits when it enters the agreement.
Roger Caudron, a spokesman for local developer Lew Weinberg, who owns the Warrior and Davidson, said securing the historic tax credit guarantees will make the lender of a bridge loan for the project more comfortable and represents one of the final steps to securing financing.
"We expect this to be the last little tidbit," he said. "We expect construction financing to be actually closed in September."
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The project, which is a part of Sioux City's broader Reinvestment District, faces a Sept. 30 deadline to provide documentation of the construction financing to the Iowa Economic Development Authority, which awarded $13.5 million in motel and hotel and sales tax relief to support the district. Those funds will be used by the other three projects, not the Warrior redevelopment.
The city in March had approved a separate development agreement package for the Warrior project that offered more than $12 million in assistance in the form of a loan, grant and property tax rebates for the project.
The city will now need to amend its plan for the urban renewal area where the Warrior and Davidson property sits. That will allow the city to issue bonds to cover the guarantees if needed.
The council will vote to set a public hearing for that amendment Monday.
With the addition of the historic tax credit guarantees, the city's overall assistance now would be as much as $30 million, according to city documents.
The project will convert the historic Warrior and Davidson in the 500 block of Sixth Street into an upscale hotel, commercial space, luxury apartments and retail and office space.
Under the plans, all of the Warrior and part of the Davidson would be converted into a Marriott Autograph brand hotel. Along with nearly 150 rooms, the hotel would include full-service amenities with a restaurant, bar, ballroom, banquet kitchen, pre-function space, business and exercise centers, and commercial space.
The Davidson would have restaurant and commercial space on the first floor, 54 hotel rooms on the second through fourth floors, and 22 luxury apartments on the fifth and sixth floors. The apartments would range from studio to three-bedroom in size.
A planned skywalk would cross Sixth Street to connect the two buildings with the Orpheum Theatre and Martin Luther King Jr. Transportation Center's parking ramp. Surface parking with 130 spaces would sit to the north of the hotel.
The city's Reinvestment District project includes four economic development projects valued at approximately $130 million. The state has granted contingent approval for $13.5 million in future motel/hotel and sales taxes from new developments in the district over 20 years.
The Reinvestment District project also includes construction of a Courtyard by Marriott hotel and an adjacent two-level parking ramp. The hotel will connect to the city-owned Convention Center at 801 Fourth Street, where some convention center space will be converted into a ballroom. Other reinvestment projects include construction of a Siouxland Expo Center at the site of the former John Morrell pork plant, and Virginia Square, a residential and commercial development that involved the renovation of a series of historic structures in the 100 block of Virginia Street.
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