ALBANY, Ga. -- The developer of the Hilton Garden Inn in downtown Albany is asking the city of Albany to agree to a five-year standstill on its loan as it prepares to pay off another loan on the property.
The city is in a second-tier loan position on the Hilton property with about $4.3 million left outstanding on the joint city-county Section 108 loan.
The first-tier loan position belongs primarily to SunTrust Bank and several other local banks who financed millions in additional funding.
Assistant City Manager James Taylor says the developer, Albany Holdings L.L.C., plans to secure an additional loan with lower interest rates from Georgia's Own Credit Union out of Cobb County to pay off the SunTrust loan.
What the city is weighing is whether to essentially waive their option to move on the property without giving notice to the developer over the next five years.
"They're basically asking us to take a standstill position on the Section 108 loan," Taylor said, "which means that we can't do a hostile takeover or buy them out for the next five years."
The same condition was approved on the first loan, Taylor said, when the entity formerly known as Albany Tomorrow Inc. put together a loan package for the developers.
Additionally, the developers are asking the Albany-Dougherty Inner City Authority for the same concession on a $500,000 loan that was brokered through the OneGeorgia program.
Albany Holdings received deferred payment on all three loans.
Payments on the principal for the first loan were due January 2010 and the OneGeorgia loan in October.
They've also started interest and principal payments on the Section 108 loan, Taylor said, which is now down to $4.3 million from the original $5 million pledged.