Downtown megadeveloper Darko Vranich has been approved for another multimillion loan from Hamilton's downtown investment fund.

The city's general issues committee approved lending Vranich more than $4.8 million Wednesday. That's in addition to more than $16.2 million he already owes the city for other projects.

The latest loan is to help finance a 12-storey, 100-unit building on a vacant lot at 220 Cannon St. E., the south-east corner of Cannon and Cathcart streets.

The money is coming from the city's $35 million Hamilton Downtown Multi-Residential Property Investment Program, an effort to encourage residential development in the city core -- apartments and condos which are then expected to trigger demand for restaurants and shops.

After committee members passed the loan proposal without discussion, Mayor Fred Eisenberger said the city is getting a good return on a program that is spurring development in the core.

"If we didn't have this we'd still be seeing development, but it would be at a slower pace," he said.

Using taxpayer money to spur such projects, he said, may become unnecessary in the future "but I don't think today is that day."

The loans to Vranich, he added, are producing good results for the city because he is making projects happen, especially in the downtown core.

"He is building what he has promised to build," Eisenberger said.

Ward 2 Coun. Jason Farr, said Vranich's projects across the city, especially in the core, are paying dividends. His downtown Staybridge and Homewood hotels are helping draw more convention business to the city and his condo projects, especially at the former federal building on Main Street West are selling quickly, promising much-needed residents for the core.

In a report to councillors, city staff said without the loan the project may be delayed or cancelled

Loans under the downtown program are interest-free for projects that result in residential developments in the core and are limited to 25 per cent of the construction value of a project. Money is advanced in stages as work proceeds and repayment starts a year after "substantial completion" of the project.

Vranich already has loans outstanding for projects at 68 George Street, 40 Bay Street South and 150 Main Street West totalling more than $18.6 million. As of March 31, the total outstanding for the three projects was more than $16.2 million.

Before getting a cheque from the city Vranich will be required to provide personal and corporate guarantees for the loan.

The general issues committee decision must be ratified by city council before becoming official.

Steve Arnold Steve Arnold is a business reporter with The Hamilton Spectator.

Email: sarnold@thespec.com Twitter: @arnoldatthespec

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