Nueces County historic courthouse to receive $3M in Corpus Christi development funding

Julie Garcia | Corpus Christi

Show Caption Hide Caption 1914 Nueces County Courthouse A look at the 1914 Nueces County Courthouse from above

The Corpus Christi City Council gave developers some help toward their goal of transforming the 1914 Nueces County Courthouse into a luxury hotel.

The council approved the first reading of an ordinance approving $3 million in Type A grant funding to Nueces County Courthouse Development Partners, LLC, for the creation of jobs and infrastructure construction.

More: What to know about the historic 1914 courthouse restoration

If fully approved, these funds will be taken from the city's business/job development fund and stacked with proposed funding from the downtown Tax Increment Reinvestment Zone.

The project comes with an overall $52.5 million cost estimate.

The Type A funds, which were paid for by ⅛-cent of sales tax set aside to go toward affordable housing and economic development projects, are "rear-loaded," said Iain Vasey, president and CEO of the Corpus Christi Regional Economic Development Corporation.

"It's performance-based. The developer has to open the hotel, get the final certficate of occupancy and clear all of their liens to make sure all of the contract has been paid before we release any of the money," Vasey said at Tuesday's City Council meeting.

More: Old Nueces County Courthouse closer to final sale

The property has accumulated millions of dollars in liens and back property taxes. Each local taxing entity would have to be repaid before any city incentives were released, Vasey said.

According to the company's funding application, the courthouse plan includes renovating the existing 80,000-square-foot building and adding more than 50,000 square feet to create a 159-room hotel.

It will have a full-service restaurant and bar, meeting spaces and other amenities. About 200 parking spaces will be added.

Developers expect 189 full-time construction jobs during 2018 and 2019 throughout the completion of the project, with salaries averaging $62,500 per person. Construction is expected to last 15 months.

More: Developers looking down 'hotel route' for historic 1914 courthouse

Once opened, the hotel would be required to have at least 25 permanent new jobs. The developer expects 45 full-time jobs and another 30 part-time positions.

The developer is putting in $6.4 million of his own money while taking on $21 million in debt, according to the application. Vasey said the city could expect its return on investment in about four years.

"The city of Corpus Christi is making this commitment. Without it, the courthouse would remain in its derelict state if the taxpayers of Corpus Christi didn't back this project," Mayor pro tem Greg Smith said.

Vasey called the courthouse's location the "gateway to Corpus Christi's downtown."

"You can't tear it down because it has historic status," he said. "These historic projects are very complex financing mechanisms because you're getting into historic preservation tax credit issues. These folks have the experience to do that."

Jim McCue, project manager for Coon Restoration, said the developer was “excited” to have reached a point in the project’s span to reach a point where it’s nearly time to “see the light turn green and get it over the starting line.”

“We’ve just been very optimistic all along,” he said. “We’ve been at this for two-and-a-half years to get to this point.”

Developers with Coon Restoration, who created the development company to undertake the project, are hoping to finalize the sale of the old Nueces County Courthouse by the end of this month, a process that includes paying off nearly $2 million in back taxes owed on the property. In addition to the $3 million in Type A funding the developer is seeking from the city, it also looking to receive $1 million in Tax Increment Reinvestment Zone funding, McCue said. That latter source of funding will be considered at Downtown Management District meetings on May 15 and 22, he added.

“Once those are done, it’s off to the races,” McCue said.

A second reading is scheduled for an upcoming City Council meeting. Developers with Coon Restoration will attend the meeting.

Twitter: @ReporterJulie

Caller-Times reporter Tim Acosta contributed to this report.