ALBANY — The Albany City Commission indicated on Tuesday its willingness to defer payments for a downtown hotel whose revenues have been affected by COVID-19, but commissioners said they first want the hotel’s owners to catch up on late payments owed the city.

The Hilton Garden Inn at 101 Front St. requested that parent company Albany Holdings be allowed to delay making interest payments on the facility for six months and that the city waive late fees totaling $28,000. The late fees would be added to the principal owed on the hotel’s loan balance.

“As you know, the business uncertainty, travel restrictions, meeting-size limits and social distancing brought on by the recent outbreak and pandemic of the coronavirus has held an unprecedented and dramatic impact on hotel occupancy and use,” the company’s letter said. “We would be happy to share specific data with you, but basically occupancy is down 80 percent this morning, year over year.”

The letter, dated March 18, also said that food and beverage sales also are off by a similar amount.

Commissioners took no vote during the work session, but several said they were not willing to waive the late fees.

After hearing that the hotel had been in arrears for some time — the last payment made in March was for the month of November — they also said they would not consider deferring payments for six months until the hotel catches up on payments through February of this year.

The city obtained a Section 108 loan in 2004 from the U.S. Department of Housing and Urban Development, and in turn issued a loan of $5.5 million to Albany Holdings.

“One of the concerns I had was three months ago a (company) partner was promoting how successful (the hotel was), how occupancy was so high they were actually standing before us asking for additional money, additional deals,” Commissioner Chad Warbington said, referring to an Albany Holdings group that made a presentation to the commission in January about a proposed hotel development at the downtown mule barn site. “When they were standing before us, they were asking for additional money and they weren’t doing what they were supposed to be doing then. I’m (questioning) what is related to COVID and what isn’t.”

Mayor Bo Dorough asked who was aware that the company was behind on payments at the time it made the presentation about a second hotel.

Staff members were aware, City Manager Sharon Subadan said, but she added that she did not have that information at the time of that meeting. Subadan said that in the future, more care will be taken to determine whether companies coming before the commission seeking funding are behind on other payments to the city.

“I certainly think that’s something that should have been brought to the City Commission’s attention,” Dorough said.

Subadan told commissioners that her initial response to the company was the same as that given by commissioners.

“When they made the request, we told them you need to bring your loan current before you get a response,” she said. “At that time, they said they need the six-month deferment.”

Commissioner B.J. Fletcher also agreed with that approach.

“This is the taxpayers’ money,” she said. “This started before this crisis. They need to catch up on three or six months first before we can start talking about the effects of the virus.”

City staff also reported on the request for the city to defer payments to HUD based on Albany Holdings’ losses.

The city will field similar requests as it attempts to help businesses through the crisis, Fletcher said. City staff recommended making a written request to HUD seeking the deferment on payments and also granting the deferment to Albany Holdings.

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