The Albany City Commission agreed Tuesday to keep its No. 2 debt collection position in order to give the Hilton Garden Inn an opportunity to pay off its remaining debt.
ALBANY, Ga. -- City Commissioners tentatively agreed Tuesday to stay in the No. 2 debt collection position for money owed on the Hilton Garden Inn, to allow its parent company to refinance the remaining debt.
According to city documents, Albany Holdings LLC, the parent company of the Hilton Garden Inn, still owes more than $3.9 million to the city of Albany and is continuing to pay that figure down by roughly $21,000 per month.
The board took action Tuesday that will allow that group to refinance more than $7 million in outstanding private debt owed on the hotel project to get a lower interest rate.
In 2003, a banking consortium led by SunTrust bank, loaned the company more than $12 million. The city of Albany chipped in another $5.5 million.
Three years ago, the company refinanced the private portion of the debt and transferred it to an Atlanta-based company called "Georgia's Best Credit Union."
The current refinancing effort would give the note to another company for the $7 million that is outstanding on the note.
On the public funding side, the city granted Albany Holdings LLC a fixed-rate loan for the $5.5 million, which it had to borrow from the U.S. Department of Housing and Urban Development on a variable interest rate.
Currently the difference between the variable interest that the city owes to HUD and the fixed rate that the owners of the Hilton are repaying the city is about $18,000 per month on the remaining balance.
By staying on the second tier, the city allows Albany Holdings the opportunity to refinance but also opens itself up to repaying the remaining debt should the Hilton ever default.