Editorial: Loan recommended
As of Monday night, the Worthington City Council appeared poised to offer a bridge loan to Lexington Hotel Group so that construction of a hotel adjacent to the Events Center can remain on schedule.
The council must first host a public hearing on the matter, which is scheduled to take place during the next council meeting on July 23. We hope this hearing will not be an impediment to ensuring that this project keeps moving forward.
The loan, which if approved would likely be given in the amount of up to $400,000 over three years at an interest rate of 7 percent (at least this is what council members agreed upon Monday night), is necessary to help Lexington reached an equity total it needs to obtain permanent financing for the hotel. Sales of investment shares in the hotel -- a 75-room Comfort Suites hotel -- haven't gone as well as expected thus far, though a Lexington official attending Monday's council meeting retained optimism all the shares would be sold far sooner than later.
With this bridge loan, the city would be merely guaranteeing a portion of the equity that Lexington needs; money may never even leave community coffers should the company succeed in doing what it promises to do.
Sure, there is some risk involved, but keeping this project on the fast track is important. Voters approved the local half-cent sales tax for the Events Center back in November 2008, and a hotel adjacent to the facility has long been part of the overall vision. Waiting will only increase later costs as well as decrease the likelihood of the desired project. The council should complete the bridge loan.