More About the Pending First National Developer
One interesting story has popped up about developer Stephen Goodman following his interview yesterday - one that indicated his renovation of a historic Cleveland property was experiencing long delays and subject to litigation.
I spoke to Goodman this morning about this story, and he said the story did not accurately reflect what took place. He added millions have already been spent, that environmental remediation has been completed, crews have finished interior demolition and cut an atrium, and have started facade renovation. The building, he said, is covered with scaffolding.
His overall comment:
The suit was settled (it was between an investor group and their General Partner that invested in the project with us) and we got dragged into it. The attorney representing the investors had no legal basis to sue anyone, so he attempted to make a case in the press to get our attention. We wanted the investors out of the deal, so we paid them off and redeemed their equity. Most of the article's comments about the financing were just not factual.
The suit was settled, which we were okay in doing as it didn't cost us any more than what we were prepared to pay to buy back their equity. We just hadn't planned to do it at that point in time. We were waiting for our EB-5 raise to be finished and have all that money in. I will add this, we grew weary of the time it was taking to raise the money through the EB-5 program so we cut it off at the $10MM we had raised thus far, and went out and secured a bank loan for the gap and are pushing forward to finish the project. Through all this, we have maintained our public support of the project and still have all of our tax credits, TIF and other public sources of capital in place.
One more tidbit – Goodman said he will not be using the EB5 program with First National. I will advise from what I’ve observed over the years with projects like The Rise, The Sieber Hotel and Skirvin Hotel that financing these deals is complicated, and that renovations can go much longer than many might like. We still have a lot to learn about this project, it’s development team and the plans. But at least we’ve got our first glimpse.