The developer behind a downtown Macon loft and retail project is requesting more time to pay back a nearly $1.5 million loan after having trouble finding permanent financing.
The Macon-Bibb County Commission is expected to vote Tuesday on a measure that would extend the loan for The Dannenberg Lofts property described in 2012 as Macon’s first major renovation project since the Great Recession.
Development company 476 Third Street LLC received the $1.5 million loan for the Dannenberg through the local government.
The project is a public-private partnership among NewTown Macon, Macon-Bibb County, the Macon-Bibb County Urban Development Authority and the Development Authority of Bibb County.
The revised agreement up for a Tuesday vote would allow 476 Third Street to pay $290,404 over a three-year period beginning in January. The remaining $1.3 million would be a one-time payment after the three years, said Alex Morrison, executive director of the Urban Development Authority.
An August 2014 deadline to repay the loan was not met because of the developer’s delays meeting the compliance requirements of a Community Development Block Grant.
But an agreement was made to forebear the interest and principal from August 2014 until June 30, 2015.
476 Third Street LLC owner Gene Dunwody Sr. said a problem with financing arose because of two appraisals with drastically different values.
The first appraisal performed in December 2013 by CBRE, formerly CB Richard Ellis Group, was for $8.5 million. A second appraisal was much lower despite the building being almost fully occupied by that time, Dunwody said.
It cost about $6 million to renovate the building that was once one of the Southeast’s largest department stores.
“(The $8.5 million) was fine and we started on our permanent financing,” Dunwody said Monday. “(Another bank) we were working with had an appraisal done and said it was only worth $7 million. Consequently, that means it’s a bad appraisal and we can’t borrow the money we need at that value to pay off existing loans. We’re asking for it to be extended so we can get another appraisal.”
Dunwody said 96 to 100 percent of Dannenberg Lofts’ 69 apartments and three commercial spaces currently are occupied.
Once the $1.5 million loan is repaid, it could be reinvested into other housing and business projects.
“Hopefully this is a bridge that allows (476 Third Street) permanent financing,” Morrison said. “What we’re hoping to do is put it in the revolving loans fund as quickly as possible so we could lend it to other projects in the community.”
Last week, Commissioner Elaine Lucas questioned why many businesses in the community don’t receive the same support from the county as a project like Dannenberg has received.
“It’s great to have lofts, but does this government have the responsibility to underwrite those developments?” she asked at a July 14 committee meeting.
Commissioner Al Tillman said there also should be more effort to get minorities involved in development.
“We have to encourage minorities and have to go out and find them,” he said last week.
The revised loan agreement for the Dannenberg also would require that $43,650 in interest is paid off by the end of the year.
Information from Telegraph archives was used in this report. To contact writer Stanley Dunlap, call 744-4623.