Controversial Funding Program Could Swipe $20 Millon From Downtown Hotel Plans

Controversial Funding Program Could Swipe $20 Millon From Downtown Hotel Plans

The proposed 330 room convention center hotel at 435 Park in Downtown Des Moines has generated a new buzz for the city.

Davis Sanders with Renaissance Design Group in Des Moines said, "The lobby is going to be dynamic. Not like anything else in Des Moines." Iowa Event Center Hotel Corporation Board of Directors President Gerard Neugent agreed, saying, "This is like the crowning jewel because it will turn what is a successful event center even more successful."

To finance the $101 million price tag, the board of directors for the Iowa Events Center Hotel Corporation planned to use a rare government program.  It`s called EB -5. Foreign nationals who agree to invest at least $500,000 in a U.S. project, are guaranteed a green card. Neugent said, "It gives you some certainty in your financing."

A group of U.S. Senators, that includes Iowa Senator Chuck Grassley has criticized the program which is currently under investigation by the Department of Homeland Security and scheduled to expire Friday. "Senator Grassley`s office and his committee`s are very involved and there have been some issues as to how it has been administered and some questions."

The board was counting on the program to fund up to 20 percent of the hotel, which comes to about $20 million. "We are going to have to seek alternative financing that`s going to take some guarantees and the like, but we have been working on those alternative plans."

The board isn`t quite ready to close the door on the EB-5 program either. Neugent said, "No one has a crystal ball of course but we are hopeful."

While the board is not ruling out private funds to replace the nearly $20 million  from the EB-5, they are still scheduled to receive $36 million from the Iowa Reinvestment Act, a first mortgage of $30 million and money from Tax Increment Financing bonds to help funding.

Project plans are currently $3 million over budget but construction is expected to begin March 2016 with a completion date of March 2018.

The skyway near 4th and Park is expected to be demolished Thursday, Dec. 10.



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