On Tuesday, the Clarion Hotel, Marina and Conference Center played host to a meeting concerning dredging in the city of Dunkirk's harbor. On Wednesday, the city's Dunkirk Industrial Development Agency played host to the co-owners of the Clarion.
Vic Singh and Kulwant Kang are 50-50 partners in both Dunkirk Resorts Properties LLC, the owner of the Clarion, and S & K Hospitality LLC, which operates the facility. The DIDA met to consider a resolution to provide financial assistance to Dunkirk Resorts Properties LLC in the form of a mortgage recording tax exemption for financing related to the existing facility.
Robert Murray, an attorney from the firm of Harris Beach PLLC, is the DIDA's attorney for such matters and he spoke about the process the board was undertaking.
OBSERVER Photo by Gib Snyder
The Dunkirk Industrial Development Agency met Wednesday and approved a mortgage recording tax exemption for Dunkirk Resort Properties LLC, the owner of the Clarion Hotel, Marina and Conference Center. Pictured in front from left are Jason L. Schmidt Esq. and Councilman Michael Michalski. Pictured in back from left are Clarion partners Vic Singh and Kulwant Kang.
After giving a brief background of the hotel project, Harris said the current owners took over in 2005, with the underlying, existing agreements signed over to Dunkirk Resorts Properties LLC. The company is set to close on a loan with Evans Bank N.A. that will include up to $4.5 million in debt involving the Clarion.
"I think about $500,000 of that is new money. That money will be used to invest back into the facility to undertake normal maintenance and improvements, just to keep the hotel competitive," Murray told the DIDA board. "The request is to only provide a mortgage recording tax exemption on the new debt. The agency will also have to sign the new mortgage because we are in the chain of title. A mortgage recording tax in Chautauqua County is about 1.25 percent of the borrowed money and that's the request before the board today."
That 1.25 percent will amount to an estimated $52,500. The board was told the total being borrowed was $7.5 million but the DIDA was acting on the portion allocated to the partner's Dunkirk facility.
Murray stated the resolution would authorize the agency to provide the recording tax exemption and to execute the mortgage.
Fredonia attorney, Jason L. Schmidt Esq., represented S& K Hospitality LLC.
"This is a company that has weathered the storm, much like the city of Dunkirk has. These guys got involved back in 2005 and within that time between then and now, they've invested about $1.7 million into the property," Schmidt explained. "They have some high interest loans and we've gone through a pretty difficult spiraling downward of local economies everybody's aware. There's a lot of good things happening going forward. Some of that can be seen in just the fact we were able to obtain this refinance now. We've been waiting for this."
Schmidt said past plans for the outside have not been "thwarted by outside factors."
"This gives us a chance to kind of move forward along with the city and to actually see some kind of benefit going forward that everybody can recognize," he added. "It is the marquee hotel in the area. There's a lot going for it, there's a lot that needs to be done. These guys have essentially been dipping into their own pockets and family pockets in order to maintain things. Now, we're in a position to refinance. We're looking to maintain a relationship we've always had with the city and to obtain the benefit of the mortgage tax exemption you enjoy as a public benefits corporation."
Councilman Michael Michalski, a member of the DIDA board, asked about lien positions on the loan from Evans Bank. Schmidt replied that the bank will be in first position as the loan will also be used to pay off an existing loan from the Dunkirk Local Development Corporation, the owners of the harborfront property the hotel is located on.
The company is current with its city billings and its DLDC mortgage, the board was told before voting unanimously to approve the resolution concerning the deal.
After the meeting both Singh and Kang declined to comment, but Mayor Anthony J. Dolce said it was great for the company and the city. He added that under the protocol, the DIDA will collect fees in exchange for waiving the mortgage tax.
"With those fees the IDA will now be able to have an operating budget and work to increase the IDA's visibility in attracting companies to the city," Dolce stated. "Since the hotel plays such a vital role on the city's waterfront the IDA felt, and I'm in agreement, that it was a worthy investment to waive the mortgage tax. Also in this process as part of the overall deal of them refinancing, the loan that was recently finalized between the Clarion and the DLDC will be paid off in full. This is great for the company and it's great for the city and also has a nice benefit to the IDA going forward."
Dolce was asked about the role the hotel plays in the city's ongoing waterfront development.
"We look for them to play a crucial role in that they are right on the waterfront. If they develop, if we increase our tourism, they're going to need a place to stay and the hotel is right there," he replied. "It benefits the city if they continue to invest in the property, this will allow them to continue to do so. I think all the way around everybody benefits here."
The DIDA did not set a date for its next meeting.
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