This developing story will be updated.
The Hotel Northland owners have asked Green Bay officials to release it from a $2.6 million loan to facilitate a sale of the historic downtown hotel to avoid foreclosure.
The Green Bay City Council on July 21 will consider a request from the hotel’s owners, 304 North Adams Green Bay LLC, to release it from requirements to continue making payments on a U.S. Housing and Urban Development loan that helped finance the more than $50 million renovation of the hotel in the 2010s.
The city holds a subordinate mortgage on the Hotel Northland, 304 N. Adams St., related to the HUD loan. The release would put responsibility on the city to repay the remaining $2.6 million owed on the loan or risk seeing the amount deducted from the city’s annual federal Community Development Block Grant funds used to support housing and community programs for low-income households.
Octagon Credit Partners, part of the Northland’s ownership group, initially asked city officials to release the hotel from the loan payment obligation to facilitate the sale to avoid having to foreclose on the property. But the council agenda indicates Octagon has agreed to pay the city $1 million from the sale proceeds in exchange for the release.
The release would waive any obligations for the hotel prospective buyers, as well.
Green Bay Mayor Eric Genrich, in a statement to the Press-Gazette, called the proposal “the best option for the city in a less-than-ideal scenario.” He said bringing in new ownership to the Hotel Northland could benefit downtown Green Bay.
“The incoming owner understands the value and importance of the Hotel Northland to the city and they’re in a good position to improve the property for the benefit of the community,” Genrich said. “I wish the council and administration hadn’t been put in this situation, but I’m satisfied with the agreement we’ve negotiated, recognizing the alternatives were worse for the city financially and worse for the health of our downtown.”
The $1 million windfall would cover about four years of loan payments and give the city time to figure out another funding source to use to pay off the last $1.6 million.
The loan in question recalls a series of financial struggles to complete the hotel’s $55 million renovation and reopening meant to recapture its historical legacy.
Built in 1924 for $1 million with a Tudor Revival facade, the nine-story Hotel Northland was Green Bay’s “largest and finest hotel” for over 50 years and reflected the city’s growth, according to the Wisconsin Historical Society. It was a nexus for social events. It was home to Curly Lambeau and several Green Bay Packers players. The likes of then-presidential candidate John F. Kennedy stayed there.
It turned into low-income apartments for seniors from 1979 until 2010 before being vacated. “Sadly, this once former crown jewel of the community had become a dilapidated and deserted shadow of its former self,” according to architectural firm Kahler Slater.
According to the historic preservation nonprofit Rethos, the building was the poster project for a law expanding Wisconsin’s tax credits meant to rehabilitate historic buildings. Then-Gov. Scott Walker in December 2013 signed the legislation at the hotel slated to be redeveloped for over $35 million, including a mixture of federal, state and local tax incentives and grants.
At the project’s helm were Frantz Community Investors, the developer, and KPH Construction, the general contractor. Both agreed to a 50-50 partnership in Hotel Northland LLC, the umbrella company for the redevelopment.
Frantz Community Investors said in 2014 that it had cobbled together enough financing to begin construction that November. A HUD loan not to exceed $4.7 million was approved by the city’s Redevelopment Authority. The money borrowed by the city would cover the increased costs of the project that grew to a total of $40 million, according to the developer.
By 2015, project costs grew to $44 million.
The senior lender to the project, First Merit Bank (later part of Huntington Bank), warned in May 2016 that the developers risked default. That November, it gave notice that it would withdraw its $12.8 million loan.
A lawsuit over ownership landed the hotel in receivership, with renovations resuming in December 2017 after former Brown County Judge William Atkinson approved a cash infusion of almost $8 million. The money was meant to backpay 16 subcontractors for what they were owed and included nearly $51,000 to be paid for interest accrued from the city’s HUD loan.
The hotel, now rated four-diamonds by AAA and part of the Marriott Autograph Collection of upscale and luxury hotels, officially opened in February 2019. Total costs ended up around $55 million.
Jesse Lin is a reporter covering the community of Green Bay and its surroundings, as well as politics in northeastern Wisconsin. He also writes a weekly column answering reader questions about Green Bay. Contact and send him questions at 920-834-4250 or jlin@usatodayco.com.
Contact business reporter Jeff Bollier at (920) 431-8387 or jbollier@usatodayco.com. Follow him on X at @JeffBollier.
This article originally appeared on Green Bay Press-Gazette: Hotel Northland sale hinges on Green Bay Council waiving $2.6M loan
Reporting by Jeff Bollier and Jesse Lin, Green Bay Press-Gazette / Green Bay Press-Gazette
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By Jeff Bollier and Jesse Lin, Green Bay Press-Gazette | USA TODAY Network
