Ted Owens My Turn: Addressing confusion on Hotel Avery
Several folks have asked me about the action the board of supervisors recently took on behalf of the Hotel Avery and the American Recovery and Reinvestment Act. There appears to be some confusion as to what was done and what was not done.
ARRA created two fairly new methods of financing available to local government for economic development; Recovery Zone Facility Bonds and Economic Development Bonds. These bonds are federally backed low interest loan opportunities for qualified, job producing and and#8220;shovel readyand#8221; projects. The bonds are issued by the California Statewide Communities Authority through a Joint Powers Agreement with more than 480 cities and counties. Applicants could be private or public. These ARRA bonds are not gifts; they are loans and require the same underwriting rigors as traditional lending institutions and are to be paid back with interest by the borrower.
In Nevada County, there were only two entities that sought to utilize ARRA Recovery Zone bonds, the Town of Truckee for downtown redevelopment projects and Hotel Avery. Both made application prior to the expiration date to have done so.
Traditional lenders have all-but dried up due to the economy, and while and#8220;in business,and#8221; they are not anxious to lend unless there is a willingness to pay steep interest rates, if you qualify. In the case of the Avery, the board of supervisors had to decide thumbs up or thumbs down on the projectand#8217;s financing proposal before they could engage in the underwriting process with California Communities as an alternative method of finance.
It is important to note that these bonds, if not approved by California Communities for use within Nevada County by Dec. 31, 2010, will go away. If the bonds are issued, the borrower must expend them by Dec. 31, 2012, thus ensuring the project moves forward and creates jobs now, when they are most needed.
The Hotel Avery was conditionally approved by the Town of Truckee and will, if approved for Recovery Zone Bonds, begin this Fall rather than years from now, creating up to 100 desperately needed local jobs during construction and 30 to 40 permanent jobs following completion. Additionally, the hotel will bring more visitors downtown to shop and dine. On that basis, I felt compelled to take the position that Avery should have the opportunity to move on to the next step.
Ted Owens is a Nevada County Supervisor for District 5, which includes Truckee.