A proposed $250 million project that would include a baseball stadium, hotel and retail shops in downtown Huntington hit a major roadblock Thursday.
The West Virginia Economic Development Authority declined to authorize a developer's plan to issue up to $50 million in tax-exempt bonds to help finance the waterfront project.
"Obviously, it's a setback," said Keith McGuire, president of Commercial Property Resource Inc. "There's more work that needs to be done."
Authority members turned down the project - called RiverPlace - after the agency's executive director, David Warner, said McGuire and his Lexington, Ky.-based business partner hadn't signed agreements with Marshall University and the West Virginia Public Port Authority.
"Because there are public entities involved, there are formal agreements that haven't been put in place that are needed to move forward," Warner told authority members. "They're not quite ready to proceed yet."
Warner and board members said they were aware of published reports about McGuire's business partner, Brad Burgess, who has a trail of failed projects stretching from Lexington to Findlay, Ohio. Burgess did not attend Thursday's meeting in Charleston.
Board members said the developer's past didn't figure into their decision to turn down the Huntington project.
After the meeting, McGuire said the media reports were inaccurate, but declined to elaborate. He also declined to disclose details about the project, saying, "There still are contracts to be negotiated."
The developers were seeking tax-exempt Recovery Zone Facility Bonds under a program established by the federal economic stimulus package.
The Port Authority hopes to complete a study on the proposed waterfront project within 90 days, said Patrick Donovan, the agency's executive director.
"We're looking at this as a public-private partnership," Donovan said after Thursday's meeting. "We see potential. We'd like to investigate that potential.
The developers want to build a 2,500-seat baseball stadium, 110-room hotel, conference center, restaurants and retail shops between the Ohio River and Huntington's Third Avenue. The stadium would become the home of Marshall University's baseball team and a summer wooden-bat league.
McGuire and Burgess plan to buy a 50-acre site along the river that includes the former ACF Industries rail-car plant.
Donovan said it would cost $6 million to $7 million to clean up environmental problems on the property.
Huntington and Port Authority officials also have talked about building a law enforcement training center, extended-stay housing, research facility and soccer field at the site.
Also Thursday, Economic Development Authority members approved $77.8 million in bonding capacity for five other projects - part of a reallocation of unused recovery zone bonds:
n The Kanawha County Regional Development Authority and West Virginia American Water plan to issue $14.5 million in bonds to build a water-main extension from Belle to Montgomery.
n Jackson County plans to issue $32.8 million bonds that would allow Armstrong World Industries to finance the construction of a metal wool plant beside the shuttered Century Aluminum plant. The company plans to create about 45 jobs. Armstrong uses metal wool to make acoustic ceiling tiles.
Gov. Joe Manchin announced Armstrong's plans last March.
n Harrison County was authorized to issue $1.62 million in bonds on behalf of Citynet, which plans to build a new corpoate headquarters in Bridgeport.
n Nicholas County received $3.5 million in bond issue capability that would finance a local doctor's plan to build a pediatric medical center near Summersville Memorial Hospital.
n Berkeley County plans to issue $10 million in bonds that would allow Entsorga Italia to build a alternative fuel preparation plant in Martinsburg.
The stimulus program allows private firms to obtain financing at lower borrowing costs because the Treasury Department subsidizes 45 percent of interest on the bonds.
Warner emphasized that the companies and investors - not the state - must pay off the tax-exempt bonds.
"Each project must have a cash flow to repay the debt," Warner said.
The Economic Development Authority has $20 million in recovery zone bonding capacity left over that it could allocate at a future meeting this summer.
The bonds must be issued by the end of the year under the federal program. Project applicants have until Aug. 1 to provide documentation that their plans are financially feasible, or their bonding capacity could be reallocated to another project.
Authority members said the Huntington project's developers could reapply under the federal program, if additional funds become available.
In other business Thursday, the Economic Development Authority tentatively approved a $1.8 million loan to Smith Services Inc., a Mercer County company that repairs electric motors for industrial machines.
Vintec Manufacturing of Fayette County received preliminary approval for a $147,000 loan to purchase a building and equipment in Gauley Bridge.
Reach Eric Eyre at email@example.com or 304-348-4869.
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