City commissioners approved a six-month extension of the development agreement for the Holiday Inn Express hotel in the South End Redevelopment Tuesday, citing a concern that sequestration could delay approval of financing. The vote was 4-1, with Mayor Loren Pepperd opposed.
Colin Noble, owner of Noble Hospitality, said he had applied for an SBA loan through the bank he is using to finance the Holiday Inn Express, but has been notified by his banker that sequestration might hold up approval. Noble called the six-month extension, which would delay the deadline until November, a precaution.
Commissioner Rich Jankovich, who works in commercial lending at Commerce Bank, verified Noble’s concern.
“I know in talking with our own SBA specialist with my company, there’s some timing lags created by sequestration and some other budget issues, which is creating havoc within small businesses and the industry,” he said. “So, we’re kind of caught in an odd situation.”
Commissioner Jim Sherow said he would support the extension because the other two projects associated with the Holiday Inn Express have progressed on schedule. Assistant city manager Jason Hilgers said Candlewood Suites was finished five months ahead of the deadline while work on the Holiday Inn Express project is also progressing.
Hilgers said a six-month delay would not affect payment of the TIFF bond, and the city would lose nothing by granting the extension. He said even if the project took 13 months to complete, it would not impact the bonds.
Pepperd said he opposed the extension because he had disapproved of how the entire deal was negotiated. Pepperd said he believed the city should have allowed others to bid on the job rather than merely accepting the proposal from Noble and his partner. He said the city did not get as much as it could have if that had been done.
Also on Tuesday’s agenda, commissioners unanimously approved the economic development package for Continental Mills that included a forgivable loan and performance grant for $219,000.
Consent agenda items were also unanimously approved, excluding the authorizing of the director of finance to establish city commercial card accounts with Commerce Bank. Jankovich abstained, noting the obvious conflict of interest presented by his employment with the bank.
Commissioners also authorized the mayor and city clerk to modify the employment agreement with city manager Ron Fehr. The modification gives Fehr a 3.9 percent increase in his base salary, which included a 1.7 percent cost of living adjustment and a 2.2 percent merit pay. Fehr’s new annual salary for 2013 will be $130,561.29. No other terms or adjustments were made to the compensation package. Fehr’s current salary is $125,669.63. Fehr has been city manager since 2000.
Commissioners also finalized prohibition of the sale or use of aerial luminary fireworks, and granted emergency powers to the city manager under special circumstances that would ban shooting fireworks and rescheduling to more appropriate days when the special circumstances have been mitigated.
During open public comment, a Kansas State University student asked commissioners to address the way the city assesses water charges. Dave Misra, 1021 Vattier, said the way the city calculates the water bill based on usage over a three month period during the previous winter months is unfair. He said he uses about one unit of water a month, but is being charged for seven units because of the use of previous renters.
Commissioner John Matta said he had also received complaints about how the city calculates base water rates, and it was becoming “harder and harder” to justify the system. Pepperd agreed that he only uses about one to two units a month and thought the seven unit charge was excessive for single residents.