MADISON, Wis. - The Edgewater Hotel renovation is set to break ground in a matter of weeks after the project's developer found a new way to finance the project.
After a deal between developer Bob Dunn and the city of Madison fell through, he applied for $66 million in low-interest loans the federal government created to help relieve disaster areas.
The federal government started a program four years ago when parts of Wisconsin were flooded in 2008. The Midwest Disaster Area Bonds are low-interest loans exempt from federal income tax.
Thirty counties are eligible for the program, including Dane County.
While the historic Edgewater Hotel wasn't damaged in the storm, Dunn said he's strengthening, or redeveloping, the tourism industry that was hit hard four years ago.
"It's not to repair any damage that was done. It's to encourage job growth and economic development to strengthen the economy, to overcompensate for the negative impacts of the storm," Dunn said.
Taxpayers aren't responsible if the Edgewater Hotel doesn't pay back the loan -- only the bond holders are. At this point, it's unclear who will buy the bonds, although Dunn said he has been in talks with wealthy Madison philanthropist Jerry Frautschi.Edgewater developer to finance project with disaster relief funds
"We're not receiving any money from the city or the federal government. It's simply a way to structure our bonds to give us a more favorable rate," Dunn said.
The Edgewater Hotel will shut down Nov. 19, the same month the renovation project begins.
Dunn said he anticipates it will reopen in the summer of 2014.