Birmingham hotelier to receive HUD loan to help develop downtown high-rise
Updated Mar 07, 2019; Posted Feb 20, 2018
Commerce Center 2027 First Ave. North (Birmingham News Photo / Tamika Moore)
By Erin Edgemon | eedgemon@al.com
The Birmingham City Council on Tuesday approved a resolution authorizing the mayor to submit a loan application to the U.S. Department of Housing and Urban Development that will help a hotelier develop a hotel in an abandoned downtown high-rise.
Through the HUD Community Development Block Grant Section 108 Loan Guarantee Program, Birmingham-based Rhaglan Hospitality will receive up to $2.5 million for a term up to 20 years to be used for property acquisition and pre-construction costs associated with the former Protective Life Company building, or Commerce Center, at 2027 First Avenue North.
The Section 108 Loan Guarantee Program provides communities with a source of financing for economic development, housing rehabilitation, public facilities, and other physical development projects.
The council passed the resolution without discussion on Tuesday.
Rhaglan Hospitality CEO Jim Lewis said the former Commerce Center, which has been empty for about 10 years, will be redeveloped into a luxury, 96-room hotel. The project may also include retail and restaurant space.
The hotel will be similar to The Redmont, a Curio Collection by Hilton hotel, also developed by Rhaglan Hospitality.
It's unclear when construction may start on the project.
JK Commerce LLC, which has the same address as Rhaglan Hospitality, bought the 14-story Commerce Center at the corner of 1st Avenue North and Richard Arrington Boulevard, for $2.8 million in November 2017, public records show.
The building was once home to Protective Life and later the Birmingham Chamber of Commerce. The 71,000-square-foot building dates back to the 1920s.