Albany Commission extends $600,000 loan for development of downtown hotel plan

ALBANY – What’s it going to cost? That’s the $64,000 question. Or, more accurately, the $600,000 question. 

The $600,000 figure is the amount of a loan the Albany City Commission has agreed this week to extend to the Woodmont Lodging Group to develop architectural plans and get a guaranteed maximum price for the construction of a downtown hotel project.

The Bethesda, Md.-based company is the third developer to take a crack at turning the former Albany Water Gas & Light facility at 205-207 Pine Ave. and the former Rosenberg Brothers Department Store/Albany Herald building on North Washington Street into a hotel.

The Pine Avenue building was formerly the Gordon Hotel and was constructed in 1925. The hotel declined after highways replaced rail transportation as a primary mode of travel and was turned into city offices in 1975.

In a recent meeting, a Woodmont spokesman gave an estimate of $52 million for the renovation project. The commission has agreed to provide up to $9 million in financing, and the $600,000 loan will count toward that total.

“We are trying to get the developers at this juncture to put a cost on what the hotel cost is going to be,” City Manager Terrell Jacobs said. “What we’re trying to do is get the GMP on the design. This is Phase 1.”

Once the commission has a firm handle on what the cost will be, the commission will have a better idea on how and whether to proceed with the project. The developer also will have a design that will help in seeking out state and federal historic tax credits, new market tax credits and other funding sources for the project.

“Once we get the guaranteed maximum price, we’ll know if it’s feasible for us to move forward with the project,” Jacobs said.

Phase 1 calls for the completion of predevelopment work, including a feasibility analysis, conceptual design and cost estimate.

The commission agreed to fund up to $600,000 in loans for that work over three installments, with the final payment coming upon completion.

If Woodmont Lodging and the city fail to reach an agreement on moving forward with the project, the company will retain the $600,000 and the city will retain the design plans.