Council approves amendment to 57 East Broad agreement after heated debate over risk and bond timing

The Newnan City Council voted to approve an amendment to the intergovernmental agreement (IGA) between the city and the Downtown Development Authority (DDA) for the 57 East Broad redevelopment, a package that reallocates how and when a roughly $2.4 million infrastructure contribution will be paid and shifts certain payment flows to the DDA rather than the hotel developer. The motion carried after extended debate about financing risk and bond-timing.

Councilors probed whether the amendment increases the city’s or the DDA’s potential exposure if the hotel developer, Red Hills Hospitality, does not complete its obligations. “If Red Hills were not to follow through on a hotel, the city would retain the 0.67 acres and we would not receive the $600,000” initially contemplated, a council member said during the discussion, urging clarity on resale and parking implications.

Tom Crimes of CDI, the master developer on the project, told the council the amendment was intended to break a financing stalemate. “We found this was a solution to move this project forward,” Crimes said. He explained that bond counsel would not provide the required opinion until certain infrastructure was in place, while Red Hills said it could not fund infrastructure until the bonds closed — a catch-22 the amendment aims to resolve by shifting timing and payment flows so work can proceed and be recouped when bonds are issued.

Supporters of the amendment said it preserves the opportunity for the hotel anchor and the surrounding development to move forward before franchise deadlines expire; opponents warned that the city and DDA would assume more short-term risk and urged additional guarantees or a work session with all parties present. One councilor proposed selling the parcel to Red Hills up front as an alternative; others said legal protections and the DDA’s vetting reduce the chance the city would be left uncompensated.

The DDA chair and members said attorneys from the parties and outside counsel had reviewed the proposal and that the DDA approved the amendment at its meeting. Councilors also debated procedural next steps during the meeting — there was a failed effort to postpone via a work session before the council ultimately voted on the amendment itself.

Outcome and next steps: The council’s vote approved the amendment as presented. Staff and DDA representatives indicated they will continue to monitor deadlines related to bond issuance and the hotel franchise agreement and will bring follow-up materials and any required transactions back to council as they materialize.