Toledo council to consider $2 million loan to South Toledo hotel

Toledo City Council on Wednesday will consider a $2 million loan guarantee for renovations to a Delta Hotel by Marriott on the University of Toledo Medical Center campus.

The 6.25 percent HUD loan guarantee would be used to fund furniture, equipment, and training costs for the South Toledo hotel. To be eligible, the project must facilitate the creation of jobs and training opportunities in Toledo and advance equitable development projects in an underserved neighborhood.

At an agenda review meeting on Sept. 4, there was support as well as opposition to the loan guarantee. At the time, Councilman Adam Martinez said he was opposed to the proposal.

“This money is a loan guarantee based on our annual allocation of Community Block Grant funding for Toledo, which is what pays for assistance with homeless shelters as well as programming the city undertakes, like home repair and lead abatement,” he said. “The concern is the annual allocation of CDBG funds would be reduced and there would be less to go into our community if this fails.”

He also questioned whether it would benefit an underserved neighborhood, one of the eligibility requirements for the loan.

“I could support a hotel in a downtown business district that has ancillary support that could spur other development,” he said. “For a standalone island in the middle of a suburban medical facility campus, with no ancillary economic impact, I can’t support that. I think there is a higher and better use of this money. We should be very diligent about this.”

If it fails, social services, housing, and other community benefit programs the city administers would be jeopardized, he said.

“In good conscience, I cannot support this project. I’m encouraging my colleagues to not support it, either,” he added.

Councilman George Sarantou supported the loan guarantee.

“I have a different perspective. I’ve been in business for several decades. I understand how business people work. What’s interesting about the proposal is that HUD has absolutely endorsed this concept all over the country,” Mr. Sarantou said. “It has been successful.”

He said the business owner has a good track record and credit reports.

“They are in the hotel business in various parts of the country, and they have not failed. I’ve also been through their credit reports, and they are very good. We’re dealing with people who have used their own money to revitalize the hotel,” he said.

Finally, he noted there is a real need for a hotel on the medical college campus.

“We need a hotel, and we need people who have experience to run it. HUD is saying this is a worthy project. These people are well qualified, and we shouldn’t turn our backs on them,” he said. “If this doesn’t go through, what we’re basically saying to the business community is we don't have faith in your ability.”

Previously known a Radisson Hotel, the facility was underused and in disrepair before it was purchased by a family business in 2021. It has since undergone $9 million in renovations.

The four-star hotel includes more than 200 guest rooms, a full-service restaurant, a Starbucks coffee bar, and 15,000 square feet of banquet venues. It will start out with 45 full-time employees.

Reached by phone, owner Sumeer Kakar said renovations include new beds, floors, furniture, and the addition of two new elevators.

“Everything is new,” he said.

Wages of employees “will be very competitive and way above minimum wage.”

Mr. Kakar took issue with Mr. Martinez’s concern that the hotel would not spur economic development.

“It’s only going to help the neighborhood to have an anchor like that,” he said. “There will be travelers who are going to be passing through the neighborhood, so it will help everybody.”

It will also help the nearby neighborhoods off Glendale and Arlington avenues, which he said were economically challenged.

“They are not doing that great. My hotel will naturally help local businesses in the area,” he said. “It’s also going to be an asset to the University of Toledo Medical Center because those people who are visiting the hospital have nowhere to go. They would rather be close to their loved ones.”

The hotel has been a popular gathering place for church groups, which he expects to continue when it opens at the end of September.

“Historically, church groups favor that hotel for its size, ample parking, and accommodations for assembly,” he said.

Each year, the hotel will offer management training programs to five high school students in the Toledo Public Schools district. They will have the opportunity to apply as paid interns and engage in training programs in different departments, from front desk, food and beverage, to culinary arts and accounting.

“It will be a great opportunity for high school kids. Through this loan guarantee, we want to be supportive and engage the community,” he said.

Mr. Kakar said he has a hotel in New York, in operation since 2017, and two in Vermont in operation since 2016.

If passed, an application will be submitted to HUD for final approval.