CARY — A downtown hotel is nearing construction with another round of unanimous approval by the Cary Town Council.
The elected board has moved to apply for a $1.4 million federal loan, which Cary would take out on behalf of developers Colin and Deanna Crossman. Thursday’s decision, earlier approved in concept, drew criticism and support from a range of Cary residents.
To some, it was a sign of unfair government support for a specific business and a specific area of town. For others, it was a sign that the wheels at last are turning in downtown Cary.
Construction on the $9.5 million hotel could begin as early as October 2014, alongside the new park set to occupy much of The Mayton Inn’s block of downtown, according to downtown consultant Ed Gawf.
A central issue for several speakers on Thursday was the Housing and Urban Development loan, for which the town would be a middleman. Critics asked whether a program meant to renew blighted neighborhoods, benefit lower-income people or meet “urgent community needs” would best be used for a boutique hotel.
They asked too why the project needed government help, and whether the town could be stuck holding the bag.
“If it’s not a good private deal , maybe it’s not a good public deal either,” said Karl Thor, who is running for the District A seat on the Cary Town Council in the Oct. 8 election.
Town council, staff and several residents defended the proposal, which was outlined in an earlier-approved agreement with the developer.
“I think the public-private partnership is the essence of what we need to move forward, and I think without it you will see stagnation in the downtown,” said Kyle Smith, who recently built a new home downtown, buying into the town’s visions of a revitalized town core.
New jobs, waivers from town rules
On the specifics, town staff and council members argued the inn would be a good fit for the HUD program because the Crossmans have guaranteed the creation of 40 low- and moderate-income jobs.
Should the project fail, they said, the sale of the property could repay much of the loan for which the town would be responsible. The town would also charge the Crossmans administrative costs for its handling of the loan.
To Gawf, the town backing the project financially would lay groundwork for further development.
“All the financial institutions want to be No. 2 in lending money downtown,” he said. “Lend the money, be successful, and they’re happy to follow.”
The town expects to hear back within 90 days of applying for the loan.
That won’t be the only town assistance for The Mayton Inn, which would be a sister to The King’s Daughters Inn in Durham. The town on Thursday also waived road-widening improvements required for East Park Street. The town could later be required to fund those improvements itself, but a staff report didn’t estimate the cost.
The town also has agreed to sell the Crossmans lots it purchased for about $1.8 million; the developers will pay about $951,000, based on the square-foot price that the town paid for the larger surrounding area. The developer can pay over 15 years at 6 percent interest.
The town also has agreed to pay about $325,000 for prep work, including the transportation of two historic houses to the site, grading work, demolition and “streetscaping;” the project is eligible too for fee waivers through the town’s downtown incentive program.
The project also would be allowed to build with only seven parking spaces, also part of a general downtown incentive. The town expects on-street and shared parking could accommodate hotel guests.
To speaker Scott DeGeugd, the town had not done enough to outline its assistance of the project, which he described as a piece-by-piece “extraction” of funding.
“The incremental spending requests that we heard tonight should be rejected because taxpayers have not been provided a complete and detailed downtown plan,” he said.
Among other benefits to the town, the Crossmans will restore two historic houses and promise to operate a hotel on the site for at least a decade, paying an estimated $130,000 in taxes annually.
Councilman Don Frantz acknowledged that he shared some speakers’ concerns about government support of businesses. But “sometimes philosophy, it just doesn’t cover everything all the time,” he said. “You’re going to spend money downtown. You can do nothing, sit back, let it become totally blighted, crime ridden, or we can make some strategic investments on the front end.”
Councilwoman Gale Adcock described the loan application as just one step in a series toward an improved downtown, while Councilwoman Jennifer Robinson pointed to town assistance, especially in land acquisition, as crucial to redeveloping the area.
The town is nearly ready to approve a site plan and issue a building permit for the hotel, Gawf said.