The City Council and city attorney have thick stacks of documents to review detailing the deal the Jackson Redevelopment Authority worked out to build a convention center hotel.
If the City Council approves the terms, the city will back $89 million in bonds to build the hotel. The city's credit rating will lower the interest rate enough to make the hotel deal feasible, the terms say.
While earlier deals called for the city and developer to split responsibility for profits and losses on the hotel, state law does not allow that kind of partnership. JRA reworked the deal so that the developer must cover all payments and shortfalls. If the developer does not pay, the city can force them into bankruptcy, the terms say.
The developer for the project would likely be TCI, which owns the land where the city wants to build the hotel. JRA has sent out a request for proposals from other developers, but Bob Swerdling, who is advising the city on the hotel deal, said he has not found any other developer willing to take full recourse for the project.
"In my opinion, TCI is captive in the deal … and therefore will give full recourse and will give you the best deal," Swerdling said. If the city did find another developer, however, Swerdling said he thinks TCI would sell the land to the city.
The City Council will have to vote on the deal before issuing the bonds, but will not vote on it at tomorrow's council meeting.
Read the term sheet here, and read more of the JFP's coverage of the convention center hotel at jfp.ms/hotel.
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