City agrees to lend Hotel Petersburg developers $2.2 million so project can finish on time
PETERSBURG – City Council agreed Tuesday night to give $2.2 million in gap financing to push the long-awaited Hotel Petersburg project across the finish line this fall.
The $2.2 million equals 1% of the anticipated yearly revenue the hotel and all of its amenities will generate. It would be paid back to the city over 20 years by the developer, Nathaniel Cuthbert of Tabb Street Development LLC.
The gap financing covers a shortfall in funding for the $26 million 64-room hotel on Tabb Street in downtown Petersburg. Jeff Sadler, a financial advisor to the developer, told council that as of January of this year, the project “was just about out of money” with still about 10-15% of construction left to complete.
The hotel is set to open no later than mid-September, Sadler told council.
If the city had not agreed to the financing, then work on the project would come to a halt and could only be rebooted once more money is found to finish it.
“We’d hate for the project to get this close to the finish line and then sit dormant for a long period of time because they couldn’t access the funding,” City Manager March Altman said. “It could bring this to a stop. So, this was just looked at as an opportunity.”
Even though he ultimately voted for the gap funding, Ward 1 Councilor Marlow Jones still seemed skeptical of the situation.
“I want to point out something,” Jones said. “We as a city, we raise hell about other projects that don’t cost the city a dime. But here we are now ready to say yes to this beautiful project, and a lot of work went into it, you know, and I’m not beating you down, sir. I just want to understand. I want the people to understand.”
Jones later said he understood about the shortfall “because that happens.”
Council approved the funding on a 6-0 vote. Ward 4 Councilor Charlie Cuthbert abstained from the discussion and the vote because Nathaniel Cuthbert is his brother.
Once considered a crown jewel for the city, Hotel Petersburg closed after 54 years in business following a devastating 1969 fire. TSD bought the property in 2020 and has spent the past four years carefully restoring it to reflect its previous grandeur.
Other features planned for the hotel include upscale dining and bars. It will carry the Hilton Tapestry brand.
The opening symbolizes Petersburg’s efforts to bring upscale accommodations to a city that has not boasted anything like that since the former Ramada Inn on West Washington Street closed and fell into major disrepair. Petersburg has classified it as a “major tourism project,” which makes it eligible for the gap financing.
Bill Atkinson (he/him/his) is an award-winning journalist who covers breaking news, government and politics. Reach him at batkinson@progress-index.com or on X (formerly known as Twitter) at @BAtkinson_PI.
This article originally appeared on The Progress-Index: Petersburg advances hotel developers $2.2 million to open on time