A project to rebuild the Iron Horse Grill is moving forward from the Jackson Redevelopment Authority. The once-popular downtown restaurant, which burned twice before closing its doors in 1999, is now part of a plan that also includes a Westin Hotel.

The JRA board passed a non-binding memorandum Wednesday to agree to give developers Capital Hotel Associates between $1 million and $1.5 million in tax credits and a $2.5-million JRA loan to go toward the estimated $6 million needed to resurrect the Iron Horse Grill in the first phase of the project.

Joseph Simpson, director of Capital Hotel Associates, told JRA in December that the group's plans include a $55-million, 205-room, luxury Westin Hotel facing Congress Street at 315 Tombigbee Street. The old Mississippi Valley Title building on the lot would have to be demolished and removed for hotel construction to begin.

The memorandum, passed Wednesday, does not guarantee any money to anyone. It only states that JRA is in agreement with the proposed terms for reconstruction of the Iron Horse Grill.

"We're basically just saying that we're fixing to move forward," JRA executive director Jason Brookins said.

JRA Rejects Funding Hotel Renovation

The JRA board turned down a request for $11 million in development bonds from Mike and Steve Roberts for redevelopment of the Roberts Walthall Hotel at 225 E. Capitol St.

The hotel owners are in default on $8.5 million in Gulf Opportunity Zone, or GO Zone, bonds. They were also seeking an additional $2.5 million in bonds from JRA to help redevelop the 84-year-old hotel.

Vice chairman John Reeves said he had no problem approving the bonds despite the Roberts' lack of a personal guarantee and their defaulted status on the GO Zone bonds, if the project was worth JRA's $11 million. If the finished project was worth the investment, JRA could recoup any future defaults through the hotel, he said. However, the JRA projects committee did not make that finding.

"What (would) happen here is, a bank holds the bonds, they'll foreclose on it and sell it to somebody, and the bondholders take a hit on the bonds," Reeves said.

Allen Smith, attorney for Wells Fargo bank, told the JRA board that the hotel has until June to make good on the GO Zone bond payments. If the payments are still in default at that time, the bank will foreclose on the property.

"Somebody can come back at that time and ask us for funds, because then they'll be in it so low that we can put money into it and still be at equity," Reeves said. "The foreclosure is going to wash out the problem. The bond holders take the wrath, but that's their problem. They bought into it."