Provo officials agreed to spend about $10,000 per space to help fulfill its parking obligations for the proposed Utah County Convention Center.
The Municipal Council, acting as the Redevelopment Agency Board, agreed Tuesday to "loan" PEG Development $2 million to help it acquire land to build a 150-room hotel and 580-stall parking structure to the north of the proposed convention center. PEG is currently building the Zions Bank Financial Center on University Avenue, which will be completed in March.
The hotel property is between 100 North, 200 North, Freedom Boulevard and 300 West.
Under the agreement, 200 of the parking spaces on the hotel's property would be used for the convention center, Redevelopment Director Paul Glauser told the council. Of the remainder, 150 will be for the hotel and the remainder for future development use or the convention center as needed.
Once the hotel and parking structure is built, the loan will convert to a grant, Glauser said. The city will have first position among creditors until PEG secures additional financing, at which point the city will move to second place.
If PEG does not meet its deadlines, the city will have the right to foreclose on the property or buy PEG's interests in it to satisfy the debt.
Cameron Gunter, of PEG Development, told the council he hopes to have a Hyatt Place hotel, like the one in Salt Lake City, on the property.
The deal will help the city fulfill its obligations for the proposed convention center. While Utah County is constructing the 120,000-square-foot building, the city is responsible for providing enough parking spaces for it.
The city also purchased the property for the convention center and sold it to the county for $20. If the county does not begin construction on the center by 2012, the city gets the property back.
The Utah County Commission recently approved borrowing up to $45 million to finance the construction, and officials are meeting with architects.
Utah County Commissioner Gary Anderson earlier said the convention center was a key element in revitalizing downtown Provo.
