The Eyde Co. wants the city to back a $10 million loan to revive the downtown skyscraper.
Renovating the former Fiberglas Tower downtown into a mix of apartments, a hotel, and a restaurant will create 400 permanent jobs, but the project can't happen without Toledo backing a $10 million loan, the building's owners told City Council Wednesday.
Councilmen who last month seemed completely against putting the city on the hook for the loan at all, warmed up to the idea yesterday after a nearly three-hour meeting at which representatives from the Eyde Co. of Lansing made their case for reviving the structure and downtown.
"This is night and day to what was presented to council a month ago," said Councilman Joe McNamara. "I am more comfortable with the deal now, knowing we would have first position on the mortgage, and even if everything flops, we will then have a building with value."
Eyde wants council's permission to apply for $10 million in a 20-year, Section 108 loan from the federal Department of Housing and Urban Development. The company also needs $2 million from a Brownfield Economic Development Initiative grant, which can be used to make the interest-only payments on the Section 108 loan during the first seven years.
Nick Eyde, whose family owns the firm, said the two financing pieces are key, and would allow the building "to stabilize for seven years" because with the grant, they would not have to make payments on the loan during that time.
Councilman Rob Ludeman, chairman of council's economic development committee, said it would call a special council meeting Tuesday to vote on approving a change to the project's one-year action plan, which allows Eyde to apply for the $10 million before a July 6 deadline.
Meanwhile, Lucas County Commissioner Pete Gerken urged council to apply for the funds.
Mr. Gerken said the commissioners and the Toledo-Lucas County Port Authority have a plan to raze the tower's garage for $3 million and build one for $9 million. The port authority owns the garage.
He acknowledged that renovating the skyscraper would carry some risk for the city, but noted that the county had invested $105 million for a downtown arena as well as $45 million for Fifth Third Field several years ago.
"These projects are not isolated and we are your partners," Mr. Gerken said. "Just apply."
Dean Monske, Toledo's deputy mayor for external affairs, said on Tuesday that if the project were to fail, the city would not be on the hook for the balance of the loan and interest.
That contradicted what council was told at a May 3 economic development meeting. At that time, council was told that if the project were to fail, the city would be responsible for the balance of the loan and interest and would have to pay it off with its Community Development Block Grant funding, which is distributed through HUD and then funneled by the city to different nonprofit organizations.
Yesterday, Mark Briggs, a consultant hired by Eyde, said the city would be responsible for the annual debt obligation of about $1.05 million - but only during the last 13 years of the loan's term, because the first seven would be covered through the Brownfield Economic Development Initiative grant. But that would happen only if the city did not sell the building before the seven years is up.
Councilman D. Michael Collins described Eyde's $44 million redevelopment plan as a collage of financing in which they contribute, at most $5 million, which he said was troubling.
Mr. Eyde later said the firm has invested in the building by keeping it from becoming an eyesore in an important part of downtown near Huntington Center arena, Fifth Third Field, and the SeaGate Convention Centre.
"It doesn't look good for the building if [the renovation] does not go forward," he said.
Mr. Eyde noted that the city would own the building should the company default, but he stressed that Eyde had never defaulted on anything.
The building costs the company up to $300,000 a year to maintain, he said.
In August, 2008, Eyde announced a plan to remake the onetime Owens Corning headquarters into a complex that would include a 96-room hotel, a restaurant, and market-rate residential units.
The building at Jefferson Avenue and St. Clair Street, now known as the Tower on the Maumee, has been vacant since 1996, when Owens Corning moved to its campus-style headquarters on the Maumee River.
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