Money time

An attorney for the developer of a hotel proposed for downtown Springfield says the project is on track.

But city officials say they haven’t yet received proof of private financing, which is required before the city can release tax increment financing money, and the deadline to provide such information is near.

“If the developer needs additional time to confirm and finalize the financing documents and the closing date then the developer should make a request in writing to amend the redevelopment agreement and extend the time for performance,” corporation counsel Jim Zerkle wrote in a Tuesday email to Chicago attorney Craig Jeffrey, who is representing the developer. “You may recall that the redevelopment agreement requires the submission of all project contracts, building construction plans to the city and that the project work begin during March 2020.”

Under terms of the deal with the city, the developer has until Friday to produce documents verifying that private financing is in place. Jeffrey did not respond to an email or a voice mail. In a Monday email to Zerkle, he said he expects loan documents to be ready this week.

“DK Collection continues to be on track,” Jeffrey wrote.

The city last year allocated more than $7.6 million in tax increment financing to build the hotel at Fourth and Washington streets, with the bulk of money to be paid out over years save for $450,000 that would be used at the start to acquire property. An agreement for the developer to buy land where Club Station House now sits expired last summer with neither land nor money changing hands. The developer also needs a municipal garage for the project, which the city has agreed to provide as part of the development package. Ryan Bandy, Station House owner, says he’s tried contacting the developer via email, most recently last fall. “I never got a response,” Bandy said. “I think it’s dead.”

Not so, according to two letters from Gestion De Patriomonio Gold, a Spanish company, provided to the city by the developer in January. On Dec. 20, Martin Jeronimo Hernandez, a Gestion De Patriomonio Gold Gold official, sent DK Collection a letter of interest, stating the firm is interested “in fully funding your hotel construction project.” On Jan. 27, Hernandez sent a letter to DK titled “Debt Financing Approval.”

“We will send over the loan documents upon the finalization of the loan file,” Hernandez wrote.

In a Jan. 6 letter sent to Hernandez, DK’s founder and co-owner wrote that the Spanish company and the developer are working on a $73.5 million financing deal for the hotel. The name of the DK founder and co-owner who wrote the letter was redacted in a copy supplied by the city by the developer. Zerkle wouldn’t say whether he’s comfortable with the name of a principal of a business seeking public money being redacted.

“What do you think?” Zerkle responded. “No comment.”

According to letterhead on correspondence supplied by the city, Gestion Patrimonio Gold is affiliated Mondial Finances Trading Ltd., which is based in England. The Spanish company was launched in 2013, according to the firm’s website, and is focused on “financial trading.” The company also is involved in hotel management.

“From our offices in Canary Island, Spain, we manage an extensive portfolio of exceptional hotels: boutique hotels, luxury holiday hotels, regional groups and local and international companies,” the website states. “We focus on the results and discover the hidden economic potential of your hotel.” The company, according to its website, has seven “strategic areas” ranging from the automotive sector to “human capital development.”

The website includes several tabs that, when clicked on, include text in Spanish as well as English text that describes an online travel agency. A “future projects” list on the home page includes oil and gas, banking, financial services, infrastructure and construction as well as “raw materials, water, energy, purchase hotels.”

In his Monday email to Zerkle, Jeffrey wrote that the developer has scheduled a March 18 meeting with its architect, civil engineer, general contractor “and overall development team.” Expected attendees, Jeffrey wrote, include Crawford, Murphy and Tilly and O’Shea Builders, both Springfield companies. Contracts with the two companies and several others, Jeffrey wrote are “out for signature.”

In his Tuesday email, Zerkle invited Jeffrey, if needed, to ask for a 60-day extension to secure proof of financing, an idea he said that Jeffrey and the city had discussed in January.

“We have to give them the opportunity to perform,” Zerkle said.

Contact Bruce Rushton at brushton@illinoistimes.com.

This article appears in Politics and powerlessness.