A proposed Hampton Inn became the second Downtown Brooklyn development slated to receive a $20 million tax-free loancourtesy of a federal stimulus program.
The city greenlighted the move to the Magna Hospitality Group, which paid $10.8 million last year for the former Pepper & Potter car dealership at 125 Flatbush Extension and the corner of Tillary Street, just off the Manhattan Bridge.
The developer proposes to build a 117-room, 13-story limited-service Hampton Inn hotel.
“Projects like this one, stalled due to the current lack of construction financing, are what the Recovery Zone Bond program is intended to help move forward,” said city Economic Development Corporation spokesperson Janel Patterson.
The total project cost is about $38 million and includes demolishing the one-story former car dealership building. It is expected to create about 108 construction jobs and 37 permanent jobs.
The money, which comes under the federal stimulus Recovery Zone Bond program, is open to shovel-ready commercial projects that are having trouble getting financing due to the current economic climate. To qualify, the developments must break ground by the end of 2010.
It is the second project in the area to get $20 million under the program, following the long-stalled City Point Tower project at the old Albee Square Mall site where DeKalb Avenue meets the Fulton Mall just west of Junior’s Restaurant.
Sources familiar with Downtown Brooklyn developments said the Magna Hospitality Group was ready to start building right away after buying the site, but had a hard time financing project in the current market.
“The financing of the bonds through stimulus money gives them a leg up,” said one source.
The Board of the New York City Capital Resource Corporation (NYCCRC) is expected to officially approve the tax-free bonds at their next meeting.
Officials from Magna Hospitality Group did not return calls at press time.
©2009 Community News Group
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