Dora seeks bond to build Holiday Inn Express & Suites on Terre Haute's east side

howard.greninger@tribstar.com

TERRE HAUTE - A second corporation is seeking approval for a lower-interest federal tax-exempt bond to build a new hotel on Terre Haute's east side.

Timothy J. Dora, co-owner of Dora Brothers Hospitality Corp., and member and registered agent for Sycamore Hotel Partners LLC, on Tuesday asked the Vigo County Board of Commissioners how the limited liability corporation could obtain a bond allocation. Dora is to make a formal presentation on the hotel project next week before commissioners.

The corporation plans to construct a four-story, 83-room Holiday Inn Express & Suites near the junction of Interstate 70 and Indiana 46 in the Sycamore Terrace Shopping Center, near the new Terre Haute Convention and Visitors Bureau.

The project would cost at least $10 million, Dora said Tuesday.

"The project still has to have a sound economic plan, but [the federal tax-exempt bond] allows us to get less expensive financing," Dora said. "Interest rates would be lower through a federal tax credit. We are trying to do this as quickly as possible and hope to open [next] fall.

"The problem with commercial interest rates right now is that if you can find a bank that will [loan funds], which we did, you need an appraisal that supports that value. Appraisals right now are so tough because with comparable sales, there are a lot of distressed properties that are dragging sales numbers down and the capitalization of discount rates is real high right now," Dora said.

The hotel will be owned by Sycamore Hotel Partners LLC and managed by Dora Hotel Co. under a license agreement with the InterContinental Hotel Group. Dora Hotel Co. currently operates both the Hilton Garden Inn and Candlewood Suites in downtown Terre Haute.

Commissioners this month awarded $3.54 million in recovery zone economic development bonds to help finance and construct a 153,600-square-foot warehouse/distribution center at 4780 E. Margaret Ave. for Clabber Girl, a producer of baking powder and other food goods.

That was half of the amount the county can issue under the federal Recovery Zone Economic Development Bonds program.

The bonds are part of program under the federal Stimulus Act, passed in February, which increased the borrowing capacity of local governments through a $25 billion allocation to issue two types of bonds. The act provided $15 billion for Recovery Zone Facility Bonds and $10 billion for Recovery Zone Economic Development Bonds. The allocations go to each state and to each county in a state. The U.S. Department of Treasury released the allocation amounts June 12 and all bonds must be issued by Dec. 31, 2010.

The recovery economic development bonds are issued to private businesses and do not affect the bonding capacity of the county. A private business that receives the bonds is responsible for paying them off.

The recovery zone facility bonds allow a county to obtain lower borrowing costs for economic development projects, including public infrastructure, public facilities, job training and educational programs.

Both bonds required commissioners to establish a "recovery zone," identified as an area with high unemployment or general economic distress. Commissioners designated the entire county as a recovery zone earlier this month.