Four years ago, a bill allowing The Vestcor Cos. to defer loan payments on two Downtown residential towers passed on a 12-3 vote.
Round No. 2 is approaching on additional temporary relief for the company for its 11E and The Carling holdings, but several City Council members want to see what happened during those four years.
“That’s the question,” said Richard Clark, who voted for the deal in 2010. “What’s changed in the last four years?”
During the recession, Vestcor struck a deal that for three years it would pay just the interest it owed for the $33 million in city loans it borrowed to purchase and renovate the Downtown buildings.
Now, the company is asking for another three-year period of interest-only payments on one loan and interest-only and half the principal on the other. Principal payments would be pushed back, but repaid later.
“We have to take a look at what makes the most sense,” Clark said. “At the same time, we are going to need to be really aggressive for the Downtown marketplace … and find out what do we need to do to make it succeed.”
With a new wave of council members making decisions this time, Clark said he wants to see what a “new set of eyes” brings to the discussion.
Matt Schellenberg will be one of those people, saying Thursday he understands the situation and wants to hear the specifics. But, he said, his initial impression is that more for the developer could allow the economy to pick up and benefit Downtown as a whole.
“If it goes bad, it’s a terrible reflection on what they’re trying to do Downtown,” he said. “We need to stay in the game for Downtown at this point.”
Of the three council members who voted against the 2010 bill, two are still in office. John Crescimbeni, who was one of them, said Thursday that he had a brief meeting with Vestcor’s CEO John Rood last week on the issue.
Crescimbeni said he wants to “hear all the facts” on the issue before making a decision. “I’m sure I’ll have something to say about it,” he said.
His general stance on the topic is that when the city makes such deals, “it’s a two-way street” and that both sides should uphold their end of the agreement. He said he is more in favor of deals that help residents, such as utility and property tax breaks, which would create demand, instead of providing financing to developers.
Stephen Joost, who also met with Rood, said he’s amenable to the latest proposal.
“Here’s the problem,” Joost said. “Look at the alternative.”
Foreclosing on the buildings would mean a “worse situation” for Downtown by having the city overtaking the properties at a time when “there are not a lot of takers for Downtown property,” he said.
And the city’s track record for managing properties is “terrible,” he said.
Joost said paying half the principal in the latest modification would mean the city is at least gaining some of its investment back for now.
“It is what it is. Business is slowly getting better … and I have faith in him,” Joost said of Rood.
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