Canton City Council restructures Hall of Fame Village loans to help water park financing

CANTON – The Hall of Fame Village still plans to pay back the $8.5 million in loans it received from Canton for the DoubleTree by Hilton hotel renovation, water park construction and other infrastructure projects. But it won’t be until 2046 — at least 16 years later than it first pledged.

Canton City Council on Monday agreed to restructure the two loans the city has with the Hall of Fame Village, which operates under HOF Village Hotel II LLC and the Hall of Fame Resort & Entertainment Co. in legal documents, to help the Village secure the financing necessary to complete its 147,000-square-foot football-themed water park and hotel being built south of Fulton Road NW.

Eleven of council’s 12 members approved the restructuring with council member at-large Louis Giavasis abstaining. He said he wanted to avoid any appearance of impropriety since he is the chairman of the Concert for Legends that is held at the Village.

Why does the Hall of Fame Village needed a restructured loan?

Hall of Fame Village officials told The Canton Repository in March that work at the $117 million Gameday Bay water park was continuing indoors with piping, pumps and slide equipment being installed but acknowledged that activity had slowed as the Village sought to finalize funding from multiple entities.

The Village is working with investors to purchase bonds that will be repaid through tourism development district revenue and tax-increment financing.

Canton Economic Development Director Chris Hardesty on Monday attributed some of the Village’s challenges of securing financing to the large balloon payments that the Village was expected to make on its two city loans within the next five years.

Hardesty said the Village’s continued shortfalls in raising capital have reduced the cash it needs to maintain its operations.

He said the Village also has asked the Stark Community Foundation and the Stark County Port Authority to restructure their existing loans.

How are the Hall of Fame Village loans being restructured?

Canton in 2019 loaned the Village $3.5 million at an interest rate of 0.5% for the renovated DoubleTree hotel at 320 Market Ave. S. The loan was set to mature and come due in 2030.

In 2022, the city loaned the Village $5 million at a rate of 6% for infrastructure improvements at the Village, including the water park and hotel. The loan was set to mature and come due in 2029.

Under the restructuring, council agreed to defer all payments and interest on the loans until July 1, 2026. When the principal and interest payments restart on July 1, 2026, both loans will be for a 20-year term with a 5% interest rate.

Hardesty said the city will recoup more money over the term of the extended and restructured loans.

Canton previously was set to make roughly $10.15 million in total payments, including $1.65 million in interest on top of the $8.5 million in principal.

With the restructuring, Canton will make $13.84 million in total payments, with the $8.5 million in principal, $4.8 million in new interest plus the $540,000 in interest that already has been collected.

What did council, mayor say about the loan restructuring?

Ward 9 Council member Frank Morris said he supported the loan restructuring because it increases the interest rate on the DoubleTree hotel loan from 0.5% to 5%, which he believed was a mistake five years ago.

“This will be the first and last time I vote in favor of the Hall of Fame Village,” he said.

Mayor William V. Sherer II, who previously has made it clear that Canton doesn’t not intend to loan the Village any additional funds, supports council’s decision to restructure the loan. He said the city needs the Village to be successful, and the new agreement means Canton will reap more money over the life of the loan.

The Village plans to release its first quarter fiscal 2024 results on May 13, after the close of trading on Nasdaq.

Reach Canton Repository staff writer Kelli Weir at 330-580-8339 or kelli.weir@cantonrep.com.

This article originally appeared on The Repository: Hall of Fame Village seeks Canton's help in restructuring its loans