Developers Miss Financing Deadline, Paducah Riverfront Hotel Project Delayed
Paducah city officials say the developers of a multi-million downtown hotel project missed the city’s deadline for securing their bank loan.
The planned $19 million project would have added lodging downtown for large events including the annual quilt show. After months of planning and negotiation, the city commission gave the developers the Jan 29 deadline to secure their end of the bank loan.
As of 2pm today, the developers did not meet those requirements.
City Manager Jeff Pederson says the current situation is only a delay and that the project will move forward.
"It's an extension of the timeline with the possibility of a change in players," said Pederson. "But the project remains intact."
“It’s just a hiccup in the process right now," said Mayor Gayle Kaler. "We will absolutely have a hotel in downtown Paducah. We’re not sure who yet, exactly when, but it will definitely happen.”
The city’s development officials have said that the project was also experiencing planning delays over the last few months including a change to the hotel’s architectural design. Pederson says the city is not certain whether that was the reason the developers didn't follow through.
"As far as delay with design, that's one of the components of the preparation that was entirely in the hands of the developers," said Pederson. "It's a fact of common knowledge that that did not proceed along the timeline that might have been expected. But, whether that delay was a contributing factor to today's situation, we don't know."
He says that, although construction hasn't started, there have been some significant costs incurred by the developers, but not the city.
“As far as the city goes, we have not conveyed to the developers any of the project incentives that were negotiated or part of the development agreement, so in that sense our war-chest, if you will, remains full should we have the need or make the determination to go in search of another project partner," said Pederson.
"It's also a project that because of its location requires a more expensive type of construction than [a hotel] out on the interstate," said Pederson. "So, as the complexity gets larger, the dollar signs get bigger, the role the city needs to play to make it happen gets greater. All of that has come to light over this period of time, the challenges have been identified, they have been met, and we are ready to move forward."
Kaler says the current situation will not affect the Quilt Show in April.
"It doesn't affect it at all in any negative way," said Kaler. "It's actually worked out very well for the quilt show because they'll have use of the pavilion again. So, all the vendors are happy, the quilt show management is happy, it's going to be a very good quilt show this year.
The city commission meets Tuesday to discuss the options for moving forward with the project.