Funding for the hotel and convention center has shifted from public to private funds, and the Warren County Convention Center Authority is no longer involved in project as of Friday morning.
In a letter to the authority, developer Tim King said funding for the hotel and convention center was to come from the Pennsylvania Department of Community and Economic Development in Infrastructure and Facilities Improvement Program in annual maximum disbursements of $311,000, totaling $5.6 million in funds, are no longer going to be used.
"At this time we inform the WCCA that the IFIP Grant is no longer applicable nor required and there is no need to continue the work with WCCA in regards to providing any financial assistance to the project. In our work to move forward we will provide for repayment of all funds advanced to the WCCA by the City of Warren. We thank the WCCA for their work and participation through a very arduous period," Tim King said in a letter to the authority."
King also gave three main reasons for passing on the IFIP, including that "The financing for the project (debt portion) will be no more than 10 years and very likely less" which leaves the grant amount available less than the original $6.2 million; improved market conditions since the approval of the grant in 2009 "indicates to the equity and debt parties moving forward with us to determine the grant to be unnecessary burden on the development team in regards to the overall project design, construction, administration and management work ahead"; and uncertainty about how the WCCA would exit from the "ownership structure up to loan pay-off and the IFIP grant being terminated, which could occur as soon as the fifth year of operations."
Greg Fraser, the authority's vice president, said the group has no knowledge of the structure of the private funding for the project, which is "all private."
"Which eliminates WCCA involvement," he said.
The authority had to find matching permanent financing for the project to secure the grant and the deadline to do so was April 1. The DCED granted a 30-day extension on the funds, but the authority did not close the deal and the deadline passed.
After executive session, WCCA Chairman Gary Baldensperger said the authority would need to send a letter to King outlining the expenses of the authority that Warren Hospitality Associates would cover.
Fraser said that it would be appropriate to confirm King is terminating the IFIP and involvement with the authority.
He described the change in funding as a "positive thing" because "the city will gain a new taxable facility."
"They can fund it without any governmental assistance," Fraser said.
The authority will remain intact, unless the city decides the group is no longer required, Baldensperger said.
The next scheduled meeting is July 10.