Columbus Light & Water is mulling a $650,000 loan to the city of Columbus as the city prepares to buy the Gilmer Inn.
The city is set to close on the $425,000 purchase today.
The city council approved the purchase of the Main Street hotel from Shareeji LLC in late October. The purchase agreement allowed the owners and residents 60 days from Oct. 20 to remove any personal or other property from the building before the city begins preparing to demolish the hotel.
City attorney Jeff Turnage said the city has used its own funding for the Gilmer Inn’s purchase price to finalize the deal today. Turnage said city is still pursuing the loan from CL&W.
The requested $650,000 from CL&W includes the $425,000 for the Gilmer Inn, according to a draft document provided to The Dispatch. It also includes $225,000 for the building that once housed Brumley Sporting Goods, which is directly beside the Gilmer Inn. Turnage said the city has not yet finalized an agreement for the sporting goods store, though the document notes the city plans to purchase it within 30 days.
Columbus Mayor Robert Smith said the city’s effort to seek the funding through CL&W is the result of a push for the city, Columbus-Lowndes Convention & Visitors Bureau and CL&W to work together on economic development.
“That’s the main reason why we’re doing that,” Smith said. “It’s a partnership. We formed an economic development committee consisting of myself representing the city, Mr. Jeff Smith representing Columbus Light and Water, and Nancy Carpenter and Mark Castleberry representing the Convention and Visitors Bureau.”
Smith said the city has worked with CL&W in the past on projects such as the Trotter Center renovations and work on Military Road.
He said the city is not seeking the loan because of low funding or other financial pressures.
“That’s not at all a problem,” he said. “If you check our credit rating, we have an A+ credit rating.”
The city has not yet announced any plans for the Gilmer site.
If CL&W agrees to the loan, the city will return the payment over a five-year period with annual payments of $100,000 for the first two years and $150,000 the final three years.
The CL&W board considered the loan at its most recent meeting but has not taken any action on it.
“We wanted to get back with (attorney Jeff Smith) to check on that and come back with some more details,” CL&W Board Chairman Andrew Colom said. “There seems to be some rush to get it resolved before some deadlines the city agreed to. But I never agreed to it and the board never agreed to it.
“This is one of those things where I agree with what they want to do, but I want to be sure we do it the right way,” Colom later added.
CL&W Manager Todd Gale said funds from the loan will come from the department’s general fund, if approved. He said general fund can fluctuate, but CL&W currently has a little more than $2 million in it.
Gale said the fund primarily serves as a reserve account for emergency situations and can cover three to four months of expenses.
Gale noted the agreement allows CL&W to use its in lieu taxes paid to the city annually as collateral if the city does not repay the loan. He said that and the larger context of CL&W’s more than $9-million budget made the annual payments from the city a relatively insubstantial risk.
Alex Holloway was formerly a reporter with The Dispatch.
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