Grant likely to be lost

Published 2:05 pm Tuesday, November 27, 2007

By Staff
Contributing Editor
Unless “solid commitments” are in place by Sunday, $750,000 in grant funding for the proposed The George — Little Inn at Washington project will revert to the state.
Washington’s City Council, during its meeting Monday, discussed the likely loss of that funding. The council reviewed a letter, dated Nov. 2, from Gail Brock, special projects coordinator for the N.C. Division of Community Assistance, to Mayor Judy Meier Jennette.
The letter noted the grant agreement, with a 30-month deadline for completion, was issued in March 2005. That completion deadline has passed.
The $750,000 has been kept in what’s similar to a home-equity loan account. Unless those “solid commitments” are in place by Sunday, that money will no longer be available to the city for distribution to the project investors.
From the time the $750,000 in grant money became available in February 2005, the project to renovate the former Hotel Louise building in downtown Washington has suffered from lack of “solid commitments” to convert the old building into a modern, downtown hotel. This summer, Progress Partners negotiated with two groups that had expressed interested in the project.
At a City Council meeting in June, Progress Partners’ managing partner Stan Friedman told council members that existing investors in The George project could align themselves with one of the groups considering taking over the project.
For more than a year, city officials have had particular concerns with The George project. Their fears that the project would not meet specific criteria by the deadline and the project would lose the $750,000 component of a $1 million grant are just days away from being realized. Earlier this year, Mayor Pro Tempore Darwin Woolard said losing that money would be a blow to the city’s efforts to revitalize its downtown.
The $250,000 part of the $1 million grant will not have to be returned to the state. The bulk of that money was spent on facade improvements to downtown buildings.
In February 2005, Washington was notified it had been awarded a $1 million grant to help renovate the old Hotel Louise building. That project called for the city to lend $750,000 to Progress Partners (a forerunner of the Progress Companies) to renovate the Hotel Louise building and create some full-time jobs. The project’s original plans called for a spa and restaurant to be housed in the renovated structure. The city was the conduit by which the grant from the state passed to The George project and the facade-improvement project for eligible downtown properties.
During Monday’s meeting, Councilman Archie Jennings, who first publicly expressed concerns with the project in October 2006, said he’s heard some people are blaming the city for the project not being under way. Jennings said the city has worked hard to help push the project along.
The councilman said he believes the project’s concept — adaptive reuse of a historic building and creation of jobs — remains a good one and is worth pursuing.
For more coverage of the council’s meeting, see future editions of the Daily News.