In partnership with Hotel Maytag Investors, LLC, the city of Newton has qualified for a $450,000 Iowa Finance Authority Workforce Housing Loan. The city council approved assuming those loan funds and sub-loaning them to the investors during Monday’s meeting.
“IFA has a Workforce Housing Loan Program designed to provide low-interest loans to municipalities for the purpose of partially funding approved Workforce housing projects within their jurisdictions,” city administrator Matt Muckler said. “City staff has submitted a completed application on behalf of the Hotel Maytag project, which has been approved by IFA.”
The renovation of the former hotel will include nine market-rate apartment units and 36 workforce housing units.
The loan agreement will go to Hatch Development Group with an attached disbursing agreement for both development companies. The agreements define access to the project’s IFA funds and outline a schedule for repayment to IFA.
The council is also moving forward with an Estoppel Certificate with Hotel Maytag Investors. The certificate is necessary to assure investment members of the Hotel Maytag project that the city acknowledges the development agreement, that it has approved the plans and that it will provide notices to the investment members as requested.
“In order to help finance the project, the developer has partnered with investment members, WNC Holding, LLC and WNC Housing, L.P.,” Muckler said. “These investment members require certain assurances from the city in order to finalize funding with the developer.”
Locating funding sources has been a key part of the Hotel Maytag project since Hatch and Hatch Development Group were selected as the preferred developer by the city one year ago. After the sale of the property was completed in August, Hatch started gathering investors and cash flow, including funds from the state and federal level.
“We are expecting to close on the financing before the end of this week, Friday,” Hatch said. “Then, we will prepare an application to the Iowa Economic Development Authority to receive a reservation for historic tax credits from the state. Once we get that done, we’ll be finished with all of our applications and financing agreements.”
Demolition on the building’s interior began in March. Crews have been tearing out carpet, gutting apartments and offices and performing asbestos abatement, along with working to preserve some of the salvageable historic aspects to the building. Hatch said when the closing is complete, the developers will again more forward with demolition and abatement with Earth Services and Abatement, the selected firm.
The developers will also begin the contract with Estes Construction. The company will start the schedule of rehabilitation and construction with a projected completion date of late February or early March of 2019.
Even with only the demolition work completed, Hatch said he excited about the prospects the building has for the city of Newton.
“We’re pleased to be here. We know what you have been through the past ten years,” Hatch said. “You have a story to tell and it’s going to be more than just the revitalization of Newton. It is going to be historical landmark. We are very proud to be a part of that.”
Contact Jamee A. Pierson at 641-792-3121 ext. 6534 or firstname.lastname@example.org