Blanche Hotel Train of Advisors Pulled into City Hall Last Night: Lots of Pictures - Not Much New
Posted February 24, 2015 11:28 am
A full house was in City Hall last night to listen. City Manager Johnson is at the microphone.
LAKE CITY, FL – The long-awaited arrival of the Blanche Hotel train of advisors and consultants finally pulled into Lake City, City Hall last night. They played to a full house of residents, business owners, downtown property owners, and City and County officials. There were oohs – ahs and lots of hyperbole. It was a two-man show of City Manager Johnson and IDP's President Rhett Holmes. There were lots of pretty drawings. City Manager Johnson left the financing shrouded in mystery, telling the audience, "No details tonight will be conveyed."
City Councilwoman and community fixture, Melinda Moses, gave an upbeat and brief rundown of the history of the Blanche, not failing to mention the stays of the legendary Al Capone. She then turned the meeting over to City Manager Wendell Johnson.
Open and Transparent?
Veteran Commissioner Ronald Williams listens to Mr. Johnson.
City Manager Johnson came to the microphone. He explained the financing. He said, "Construction financing proposed by IDP in partnership with the City and County is by means of conventional financing, federal historic tax credits, federal new market tax credits, soft loans and grants, and developer equity at a projected cost of about $14 million. They will tell you in a few minutes the sources of those funds."
They didn't and Mr. Johnson continued, "In the past few months, since we've entered into discussions with them, there's been a lot of community curiosity about – what is going to be the details. I'm here to tell you tonight, the details of such an arrangement cannot be conveyed nor divulged until you've got an agreement and it has to start with me, with Dale Williams, with Ben Scott, and with Mark Hunter. For many weeks we have been talking and going back and forth with IDP to put together a solid plan that I and these other men will be willing to take to our bosses and say this is something that we want you to look at."
There weren't any plans mentioned. It is not clear if the ghost of Al Capone is working on the secretive financing.
Mr. Johnson continued, "We can't just throw it out there and let it get kicked around. No details tonight will be conveyed. That will only be conveyed to those people who will have the decision and the responsibility for making that decision. I just want to make that clear... I appeal to you to look at it for the long term; to look at the value of the Blanche hotel being restored and becoming a valuable asset to this community. That's my goal for tonight.
Mr. Johnson also mentioned that he is applying for grants to build parking lots.
During the meeting your reporter showed County Manager Dale Williams a note which asked, "No details on financing? How is that legal?"
County Manager Williams shook his head "no" and quietly said, "I don't think so."
Rhett Holmes: IDP's president makes his pitch
Rhett Holmes during his presentation. The financing remains in the shadows.
IDP's president told the gathering: What's important tonight is getting a vision out there.This is the community's project. What makes this transaction somewhat more viable than it may have been in the past is historic tax credits and new market tax credits. That would bring about $5.5 to $6 million of equity and cash to the table that does not take a typical market rate of return. That's sorta how we get to a place like we are today.”
Other than architectural renderings of the Blanche Hotel, there were few specific details given about much of anything.
He continued, "Our goal is to put the life and soul back into this gem in your community. Your feedback is the most important feedback we can get."
He concluded, "As the Blanche goes, so goes the downtown. You will be surprised. A lot can be done. It's not going to be cheap."
County Manager Dale Williams, foreground, and Asst. County Manager Ben Scott, listen.
Ralph Kitchens asked, "How long will it take?"
Mr. Holmes answered, "It's going to take a little bit of time. The pre-development to get to a financing closing: nine to twelve months. It will then take 12 to 15 months to renovate it.
Mr. Homes explained that the New Market Tax credit piece is a critical component of the project. The New Market Tax Credits have to be applied for. No one seems able or wants to explain the New Market Tax Credit component of the project. No one is talking about what happens if the credits aren't awarded.
Your reporter asked if part of the financing is contingent on having pre-sold leases.
Mr. Holmes replied, "That will be a big part of it -- the retail and commercial space primarily... It will depend on the type of residents and tenants that are coming in."
Your reporter followed up, "Would it be possible to save the facade and do new construction inside, rather than to try and reconstruct something that was built over 100 years ago?"
Mr. Holmes said that saving the facade and building new construction inside would probably add money to the cost.
The Cost is Irrelevant – Charting New Territory
The architect, Dyke Nelson out of Baton Rouge, weighed in. "This is a gem in this community. What Rhett and his team are adept at doing is leveraging all these tax credits and things that are available to bring federal dollars into your community to be able to make this asset something... the cost is irrelevant when it comes to whether this is a viable financial project.
An unidentified resident asked, "Can you speak to the marketing process or leasing program you might bring?"
Mr. Holmes answered, "Yes and no. Yes – we're starting to think about it. We are charting new territory here."
Mr. Holmes concluded, "This is an awesome building in your downtown. I think it's a great gem that you can use to further your community. I really do."
City Manager Johnson during his remarks.
City Manager Makes Closing Remarks
City Manager Johnson told the gathering his heart and soul is in the project.
He said, "I've coined a phrase before and this is one that is in our Master Plan, 'So goes the Blanche – So goes downtown.'"
IDP's Holmes and City Manager Johnson, or somebody, have apparently come up with a marketing slogan: So goes the Blanche – so goes the downtown.
The slogan "So goes the Blanche – so goes the downtown" is not in the Master Plan.
Shortly before this article was published, Commissioner Bucky Nash told the Observer, "I never heard of that."