|HUD No. 14-0324
Joseph J. Phillips
March 24, 2014
HUD APPROVES $6 MILLION LOAN GUARANTEE TO LEXINGTON, KENTUCKY
LOUISVILLE, KY - The Department of Housing and Urban Development today announced that it is approving a $6 million loan guarantee to Lexington-Fayette Urban County Government to provide financial assistance for funding the renovation and redevelopment of the historic former First National Bank Building in downtown.
HUD's Section 108 Loan Guarantee Assistance Program enables local governments to borrow money at reduced interest rates to promote economic development, stimulate job growth, and improve public facilities. Such public investment is often needed to inspire private contributions, to provide seed money, or to simply boost confidence private firms and individuals may need to invest in distressed areas.
"HUD's Loan Guarantee Program can be a powerful public investment tool to drive economic development in underserved areas," said HUD Regional Administrator for the Southeast Ed Jennings, Jr. "This hotel project will benefit the development's access to capital that will provide the needed boost to bring commercial activity while simultaneously creating approximately 125 full time much needed jobs, many of which will be held by low- and moderate-income persons -- truly a win-win situation for Lexington-Fayette Urban County Government," said Jennings.
According to the application for a loan guarantee to HUD, Lexington will make a loan of its Section 108 loan proceeds to a developing entity, which will utilize these funds in conjunction with private financing and equity funding to transform the historic, vacant, 15-story, former First National Bank Building into the 21c Museum Hotel. Upon completion, the hotel will feature 90 rooms, a 5,000 square-foot restaurant, 5,000 square feet of meeting/conference space, and a 12,000 square-foot contemporary art museum that will be open to the public 24 hours a day. The hotel project is expected to catalyze approximately $300,000,000 of private investment into the redevelopment of 46 acres of distressed property in downtown Lexington to become the Rupp Entertainment District.
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