By Joel Hall
The City of Riverdale took several steps forward this week in the development of its "town center," including choosing an official name, expressing the intent to incorporate a nearby shopping complex, and announcing plans to include an $8 million to $9 million hotel.
To pay for the hotel's construction, city officials said they will seek federal Recovery Zone Bonds provided to economically depressed areas through the American Recovery and Reinvestment Act of 2009.
According to Michael Syphoe, executive director of the Riverdale Downtown Development Authority (DDA), the official name of the Riverdale town-center project will be the "Riverdale Promenade." He said that in addition to municipal, recreational, retail and residential components, city officials are working with the developer of a nearby shopping center on Ga. Highway 85 to re-brand the property as part of the Riverdale Promenade.
"It [the Merchant's Square Shopping Center] is owned by Infinity Properties," Syphoe said. "We are working with them to reposition that center and re-brand it ... That gives us a little more marketing strength."
Syphoe said the city plans to build a "cut-through" path from Merchant's Square to the area once known as Travon Wilson Park, where public components of the new development are being constructed. Those components include an 800-seat outdoor amphitheater, a new city hall complex and a community center.
Syphoe said that in order to complement the project, and promote the area as a conference center, the city plans to incorporate a major hotel. He said the hotel would ideally have 80 to 100 rooms.
"[With] the fact that we are about seven minutes from the airport, a lot of developers have talked about developing a hotel on the property," Syphoe said. "The idea is to pitch Riverdale as a niche, small-meeting market, specific to 50 to 150 people, max [maximum]. We did that primarily because of the situation at the surrounding convention centers, particularly the Georgia International Convention Center. It doesn't make sense for them to go after meetings that small. This could be a way to generate more money for the City of Riverdale."
As of Thursday, the city was in discussion with three potential hotel developers, Syphoe said. In order to finance the hotel's construction, he said, the city will attempt to seek American Recovery and Reinvestment Act funds.
According to the U.S. Department of the Treasury, Clayton County received $32.7 million in Recovery Zone Bonds, with $13.1 million of that amount set aside for economic-development bonds, and $19.6 million designated for facility bonds.
The U.S. Department of Treasury web site defines economic-development bonds as "a new direct federal payment subsidy" which can be used "to finance a broad range of qualified economic development projects, such as job training and educational programs." The web site defines facility bonds as "tax-exempt private activity bond that may be used by private businesses in designated recovery zones to finance a broad range of depreciable capital projects."
Riverdale City Manager Iris Jessie said the city will pursue facility bonds as a source of construction revenue for the hotel, but that in order to do so, the city will have to seek approval from the Clayton County Board of Commissioners.
"The federal government, through the state, gave an allocation in Georgia to use for private development," Jessie said. "They [the county] wouldn't be giving it to the city. It would be a source of funds that the private developer could tap into. The developer would have to put in an application and their own credit worthiness would determine if they are successful in qualifying for the recovery bonds."
Other cities in Clayton have contemplated approaching the county for Recovery Zone Bonds as a way to enhance local redevelopment projects. Forest Park City Manager John Parker said his city has considered using the bonds as a way to help with the redevelopment of its Main Street and the future development of the Fort Gillem area, but is cautious about doing so because of the burden of debt.
"These are not grants, they are bonds," Parker said. "We are evaluating that, but those dollars have to be paid back dollar-for-dollar, with interest. If you are not making enough money on that project to pay back the bond, it has to be paid back with tax dollars. You have to ask, 'Can you afford to borrow the money?'"
Syphoe said Recovery Zone Bonds are meant to be used for "shovel-ready projects" and that the bonds must be placed into service by Dec. 31, 2010. He said that if the county does not support the project with Recovery Zone Bonds, the city may pay for the construction using Tax Allocation District (TAD) funds, or by issuing its own bonds.
"The Board of Commissioners would have to vote on it," Syphoe said. "If we don't get the county funding through the recovery funds, we have a TAD that was created two years ago. Right now, the county and the school system are not participants. Our second-tier plan would be to encourage the school system and the county to be a part of the TAD."
If that fails, "the Riverdale DDA [Downtown Development Authority] would issue bonds to fund the project," he added. "These bonds would not be a burden to the city because the bonds are based purely on the financial feasibility of the project, and the private investor's financial capacity."
Clayton County Commission Chairman Eldrin Bell could not be reached for comment Thursday regarding the Recovery Zone Bonds.