The project that has been grasping the attention of Duluthians for years now was at a pretty critical point in recent weeks. In fact, it was a point so critical that it could have threatened the entire future of the project. But have no fear Duluthians for your city stepped in and saved the day for what is going to become one of the most iconic developments on the water in quite some time.
We've reported all the details about the planned project for Pier B and the LaFarge Cement Plant right here so just in case you need a refresher.
To sum it up quickly it's the $29.5 million dollar project being developed by a group of local investors such as Alessandro Guiliani who is responsible for the Clyde Iron Works development on Michigan Street in West Duluth along with well known area developer Sandy Hoff.
So here's what recently happened regarding the project.
A million dollars is a lot of money. So when you multiply that by thirty we are talking about some serious funds being needed to make this project come to fruition. Even with a development group of successful individuals and developers there is still quite a bill to financed after their contributions. That's where the concerns from the lending firm Daugherty Funding LLC came into play of what would happen if the construction loan given to finance the rest of this project went into default. Who would end up paying for it and ultimately what would become of the project? This is where the City of Duluth stepped in.
Clearly the city and the Duluth Economic Development Authority (DEDA) have sunken not only large amounts of time but also money into this project over the years. They want to not only see it become reality but they also really want to see it be a success and something Duluth can be proud of. Instead of the potential of this project being scrapped due to the developers not being able to secure the full amount of financing needed the city felt that they could help ease matters by backing the loan.
The City of Duluth has agreed to be responsible for the debt of the loan given if it goes into default and the local investors responsible for the project are unable to pay the rest of the loan off. The way that this will be done is through public dollars (many of you will groan here). What the city is requiring of the developers though in return is that the project is actually completed and that it continues to operate as a full service hotel even if in default.
In addition to the tax increment financing package that the city approved for the project in the past along with their extension of deadlines for development and other matters as enforced by the DEDA, the project really has the backing of the city to pretty much the city of Duluth's fullest extent.
Construction of the 140-room hotel, 220-seat banquet hall, 150-seat restaurant, pool, rooftop patio, pedestrian bridge to Bayfront and last but not least a marina is still expected to be completed by Spring 2016.
Now we can breathe a sigh of relief.