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City to stay at No. 2 position in Hilton debt deal

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.

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.

Comments

VietVet1 2 years, 7 months ago

OK Albany, "loan" me 5.5 million and I'll up the monthly return payment to $20,000 and call the company "Oh Albany the Great One." - - - SO, when can I get the loan? I've got my lunch pail in hand.

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alleebrin 2 years, 7 months ago

The way the City of Albany conducts business make me want to throw up!! The Hilton Garden Inn was not a good idea from the beginning. Doesn't take very long for any property downtown to be trashed!! It, too, will fall by the wayside at the taxpayers' expense, just as the Civic Center, Turtlequarium, Veterans Park and several other business deals the property owners have funded! Mark my word! And I don't even want to express my disdain with the Broad Street Bridge and Oglethorpe Arches. Geez!

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dingleberry 2 years, 7 months ago

The city is always second subordinate on every loan it makes when there is private money also involved--University Gardens being a good example of one with a loss. This includes the business loans and basically a "buy back" provision on loans made with HOME funds for houses we developed and sold. But if you want to see real debt, ADICA is the one with zillions in outstanding bonds, most of which are not backed by the taxpayer. Let's just say Albany is great at loaning good money after bad--got to be #1 at something!

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Cartman 2 years, 7 months ago

So what you're saying is: Albany is No. 1, at being No. 2.

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whattheheck 2 years, 7 months ago

Need a Philadelphia lawyer to figure out who will be the biggest loser on this one. Noted that it is Georgia's Own Credit union rather than Georgia's Best Credit Union that hooked itself in early 2011 on this loan. Suntrust is likely the winner since it got out of the arrangement--and will also sell us its building for WG&L's new home. ADICA is in there somewhere along with the city. Too much for me to cipher.

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terihdfxr1 2 years, 7 months ago

Oh but they want me to pay more taxes on my property. Urgggggggggggg I hate this city goverment. Like the Hiltons cant afford this. Get of there super high horses and pay your bills like the rest of us do.

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Cartman 2 years, 7 months ago

How would you have felt if you owned a hotel in this limited market and the city pops up and helps fund some new competition for you? Ask the Doziers. They owned Merry Acres at the time. This debacle stemmed from the reckless spending in an attempt to build a downtown, with taxpayer money. No one with any business sense got involved, except these recipient out-of-town Hilton owners. Its the result of using unqualified downtown managers and clueless commissioners. Any businessman could see it coming a mile off. And don't get me started on the two arches. Yes. There were two of them. One is up and one is probably still hidden, if metal thieves have not toted it away.

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