The Green Bay City Council, after hours of open discussion and a closed-door hearing, has voted to delay an audit of the $44 million Hotel Northland renovation project.
According to city leaders, the delay will last 30 days as councilors and project leaders work to get the whole truth behind a project that’s been plagued by setbacks, and misinformation.
On Tuesday night, councilors heard from developer Mike Frantz, who tried to quell concerns surrounding the project, including the reasons behind the loss of $12.8 million in bank financing after senior lender Huntington Bank pulled their funding.
The pulled funds were officially announced in a letter from the bank back in November 2016, claiming developers violated the term loans, though letters warning of the possibility of developers defaulting on the loan were sent starting in May.
Members of the Redevelopment Authority say this loss of funding was not made clear until recently, after a January 10th meeting where the Board was asked to approve a $500,000 gap loan to keep the project moving.
Project leaders say the $12.8 million was to be the final chunk of funding for the $44 million Hotel Northland project.
During Tuesday night’s session, Frantz explained the “alleged loan default” issue could’ve and should’ve been fixed back in May through a loan forbearance agreement. Basically, if a loan’s terms are not being met by a party, the bank can “postpone” the loan rather than default it. However, Frantz says disagreements between himself and project partner Keith Harenda stopped this from moving forward.
Frantz also claims a hit to his credit score since the project began has made finding a new senior lender difficult.
“At least in part, why we can’t get a senior lender (with me as an owner in this thing) [is because] my credit wasn’t as strong as it was when we first started,” says Frantz, “and that’s just a fact.”
Meanwhile, Alderman Mark Steuer says he and other council members are upset with the poor communication between developers and city leaders, adding the project they originally approved has changed.
“I want to see it happen, you want to see it happen. We all want to see it happen. I just feel a little duped that we voted on something, and we’re getting a different bill of goods now.”
Developers say the Hotel Northland project is 70-72 percent complete. While construction on the project has slowed, it has not stopped.
Green Bay had committed $4.7 million dollars to the project.
