City of Birmingham will help developer get federal dollars for hotel project

The Birmingham City Council, at its regular meeting for Tuesday, Feb. 20, voted to help a development company, Rhaglan Hospitality Inc., obtain the federal money it needs to help renovate the historic Commerce Center building downtown for use as a luxury hotel.

The council, as part of its consent agenda, authorized the mayor’s office to submit a loan guarantee application for up $2.5 million to the U.S. Department of Housing and Urban Development as part of the Community Development Block Grant program.

Rhaglan Hospitality is the same developer that renovated the historic Redmont Hotel on Richard Arrington Jr. Blvd. in 2016.

The company’s CEO, Jim Lewis, has told other local outlets that the new 96-room hotel will have a similar feel to the revamped Redmont.

The loan guarantee would be secured in part by the city’s pledge of its current and future CDBG funds, according to the text of the resolution.

The loan -- with a term of 20 years -- is to provide partial financing for “real property acquisition and related soft costs” for the hotel project, the resolution stated.

The 14-story Commerce Center -- located at a 2027 First Ave. North -- was built in 1928 as the Protective Life Building and became the headquarters of the Birmingham Chamber of Commerce in 1976, according to bhamwiki.com.

Over the last two decades, the building had several owners and was purchased in late 2017 for about $2.9 million by JK Commerce LLC, which has the same address as Rhaglan Hospitality, according to AL.com.