Hotel Maytag investors nix $8M loan guarantee request to city

An $8 million construction loan guarantee between the City of Newton and Hotel Maytag Investors, LLC is no longer needed, developer Jack Hatch announced on Monday. Hatch addressed the city council last week at a workshop where he asked the city to become a co-guarantor for the loan to expedite the process and have a closing date prior to the end of the year.

The move came after funding sources scheduled to be used on the project through the federal government were cut in one version of Congress’s tax reform bill. In order to get "grandfathered in" to the tax credits, Hatch was working to do a soft closing on the project by the end of 2017.

Since that time, city staff and Hatch have been closely monitoring the tax reform bill Congress is set to vote on this week and found the current bill being considered by Congress will not eliminate federal historic tax credits or workforce housing funds. With these funding sources staying in place, Hotel Maytag Investors no longer has the urgency to close on financing before the end of the year.

“Hotel Maytag is an iconic part of Newton’s past, present and future,” mayor Mike Hansen said. “Jack Hatch is an experienced developer who has come to understand the importance of the hotel to our community and he has been working tirelessly to make sure that the project moves forward. The city looks forward to continued partnership with Hotel Maytag Investors as they move forward with the project.”

The city council is still expected to discuss amending the development agreement with Hotel Maytag Investors at its Monday meeting to combine installments on a $2.75 million economic development loan and revise the development project description.