The Pittsburg City Council last week approved loaning the developer of a future hotel up to $1.5 million to facilitate construction.
The action also approved a grant up to $599,999, as long as it is less than 2% of the total project cost.
During the Sept. 16 meeting, Jordan Davis, Pittsburg’s director of community and economic development, explained that the 115-room hotel by applicant Platinum Pittsburg LLC was first approved in 2021 to be built at 2112 Loveridge Road.
“However, due to rising costs over the past few years and interest rate increases, Platinum has amended its financing strategy, and we’ve been working very closely with them to identify creative solutions to help them get this project, quite literally, off the ground,” Davis said.
Davis further noted that, as part of the loan agreement, Platinum agrees to put forth every effort to begin construction by Dec. 31 of this year.
“If they fail to commence construction before March 31 of 2025, the city shall have the right to terminate the agreement and no further obligation to disperse the funds,” he said.
The loan will be funded by the Pittsburg Power Company, a municipal joint powers agency, and the grant will come from funds from the American Rescue Plan Act, the economic stimulus bill enacted by Congress in response to the COVID-19 pandemic.
Vice Mayor Jelani Killings wanted to know what would happen should the developer sell the property. Prior to project completion, Davis said the developer would be required to pay back the funds and the city would be involved in selecting a potential buyer for the property, so that the project remains a hotel. If the sale takes place after construction, he said there will be a payoff strategy at a rate of 50% until the loan is completely repaid.
Davis said city staff anticipate the project generating about $500,000 in annual transit occupancy tax revenue, which would support the city’s general fund.
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