Council funds hotel, library amid concerns
Warren City Council back in November directed staff to move ahead with drawing up documents to allocate $1.5 million in state grant funding to a proposed boutique hotel on Liberty St.
Council approved a subgrantee agreement for that project this week but not without concerns raised about the prospective developer.
DewBoi Properties LLC has proposed what’s being called the Wendelboe Hotel, an 18-room boutique level hotel with a 25 to 40 seat cafe, according to documents presented at the meeting.
The proposed location is the former Watt Office Supplies building on Liberty Street.
Tom Christenson, who owns the firm, told council last month that the total project cost for his initiative is $4 million to $4.2 million and that the remainder of the funding would be borrowed.
The project just requires the former Watt or Wendelboe building but could include several adjacent properties that the firm is trying to acquire.
He told council he’s “pretty comfortable” with the prospects of obtaining financing, has a “significant amount of our own money to add to the pile” and said that the bank was awaiting the city’s decision.
Councilman Phil Gilbert said that he is “leary on giving $1.5 million to someone we don’t really know.” He said he is “afraid we’re getting into something. We hardly know this guy.”
Mayor Maurice Cashman references the “significant amount of money” the developer is putting into the project.
GIlbert said he’s afraid of “ending up in another pickle” as has happened in the past.
City Manager Nancy Freenock said that Christenson has been responsible and that the state Redevelopment Assistance Capital Program guidelines leave him “standing in our shoes. I don’t expect that there’s going to be any issue. I’m not a soothsayer.”
“They’re always good at first then it all falls apart,” Gilbert suggested.
Freenock said that the city and state will be reviewing everything as the project proceeds before reimbursement dollars are issued to the developer. Cashman said that structure was put in place in “the fallout of GRO-Warren.” That fallout centered on a $500,000 state grant was squandered largely on ineligible expenses.
“When you hook your horse to the wagon… you have to be comfortable (he) will finish,” Cashman said.
Councilman John Wortman called the project a “wonderful idea” and “something the city needs” but asked how repayment works if Gilbert’s concern materializes.
“He’s on the hook for it,” Freenock said. “If he defaults, the Commonwealth could come after the city” for repayment. The city, she said, could then turn around and sue him for the funds.
“If the LLC is in bankruptcy, that’s as far as you’re going,” Councilman Gregory Fraser added.
“He’s pretty far down the road on this project,” Cashman noted.
Council ultimately approved the subgrantee agreement in a 6-1 vote with Gilbert the sole dissenter.
LIBRARY FUNDS AWARDED
A RACP subgrantee agreement was also approved with the Warren Public Library, which requested $100,000 for the creation of a teen space at the library.
Kelli Knapp, the library’s director, told council that teens currently “have a very small space in the library” that “does not have access there to do much of anything.” It’s called a study room, currently.
The proposed teen space would be located in the basement and include a kitchenette, computers, graphic design capability, recording and video resources.
The RACP funding to be allocated was allocated by the state for economic development and the line item needs changed but Freenock said that State Senator Scott Hutchinson is supporting the project and that effort.