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South shore hotel deal still up in the air

BEMIDJI – The finishing touches on the deal for a new hotel attached to the Sanford Center have not yet been finalized.

The Bemidji City Council was scheduled to continue a public hearing Monday on the $400,000 contribution to the project from its revolving loan fund. The loan would be for the city-owned connection between the hotel and the Sanford Center. 

The terms of that loan constituted a business subsidy under city policy and state statute, triggering a public hearing.

 But city staff is recommending closing the public hearing Monday with no action taken. A public hearing would be re-advertised once the finances become final, according to a memo included in the city council meeting packet.

City manager John Chattin said Friday they were still waiting on a firm closing date on the hotel before having the hearing.

“There’s no sense in having one continuance after another until we get a more firm date,” Chattin said.

 He added that he had “no new information” about a potential closing date.

Developer Tripp Snyder previously told the Pioneer he was projecting a mid-December closing date, but emphasized that it was tentative. He didn’t return a call seeking comment Friday.

A deal to build the Country Inn and Suites and attached restaurant was initially agreed to more than a year ago, but financing delays have prevented shovels from going in the ground. The site is currently being insulated, and Snyder previously said they planned on construction through the winter.

 Because of the delays in the hotel deal, the council will be asked to move $778,000 from its Sanford Center contingency fund to its debt service fund Monday.

The city refinanced the bonds used to buy the southeast shore land in January. In order to meet those bond obligations, the city must have $587,092 at the end of the year in its debt service fund or authorize a tax levy.

Because the hotel deal was expected to close by the end of the year, the city didn’t propose a tax levy, according to a memo prepared by city finance director Ron Eischens.

The debt service fund will have a $191,352 deficit despite a $100,000 down payment for the hotel this spring. The $778,444 transfer is needed to meet the $587,092 requirement.

Eischens later clarified that the transfer doesn’t necessarily mean the hotel deal isn’t expected to close by the end of the year, but it needed to happen during the last meeting of the year.

He added that even if the hotel deal had been finalized by now, a smaller amount of money would have had to be transferred into the fund.

John Hageman

John Hageman covers local business and North Dakota politics. He attended the University of Minnesota in the Twin Cities, where he studied journalism and political science, and he previously worked at the Bemidji Pioneer.  

(701) 780-1244
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