The Syracuse Town Council held a public hearing regarding a community development block grant for Oakwood Retreat LLC during its regular monthly meeting Tuesday. The town is the lead applicant for the grant along with Parent Associates Inc., the company Rex Parent and his sons own, and through which are purchasing the Oakwood property.

Kristine Christlieb, community development planner with Region III-A, an economic development district and regional planning commission out of Kendallville, asked for public input on the CDBG grant for acquisition of the Oakwood Inn and surrounding property. Christlieb is preparing the grant application for the town and Oakwood Retreat LLC.

The grant is for $700,000 with approximately $359,800 to be used in job creation for people with low to moderate income. The reopening of Oakwood is expected to create 70 new jobs.

Christlieb opened the hearing to public comment on the grant or grant process. Sharon Fowler asked if the grant is just for the purchaser of Oakwood and what benefit will the town receive. Christlieb explained the town will benefit in job creation and economic development.

Fowler pointed out Parent never said anything about applying for a grant when he came to a town council meeting a few months ago to announce he was purchasing Oakwood. “Doesn’t he have the funds to purchase the property,” she asked pointing out the grant is for acquisition.

Town manager Henry DeJulia said the renovation and reopening of Oakwood was an eligible activity for a CDBG grant. He pointed out the money could come to the Syracuse community or go elsewhere. “We see putting 70 people back to work as a good thing,” he said.

Town attorney Mike Reed explained a specific number of jobs have to go to applicants who are low to moderate income for the town and the parents to be eligible for the grant.

Mike McNeal asked if the 70 jobs were for renovating the hotel and when the job was done, only seven would actually be hired to work in the hotel. Christlieb explained the funds cannot be used for renovating the hotel. Reed explained the grant would be for ongoing jobs at the inn such as bar tenders, housekeeping staff, etc.

McNeal stated he’d seen in other states similar projects where job creation is promised for a grant and nothing happens. Christlieb explained the Parents would have to sign a job creation agreement.

McNeal said he’s seen grant money given and then five or six years later there are no jobs. Reed explained the state and federal governments decided to subsidize the project to help low to moderate income people.

Reed explained the town was being asked to sign a resolution agreeing to be the lead applicant for the grant. Discussion turned to how the town could protect itself should the deal fall through.

Reed said Oakwood Retreat LLC has approximately $5.3 million available in loans and cash on hand. One of the documents he had was a second mortgage on the Oakwood property with the town being the lien holder, a stipulation the Parents agreed to as a provision of the town being lead applicant . Farmers State Bank would hold the first mortgage of $1.65 million.

Christlieb said a second public hearing will take place before funds are released. Councilman Brian Woody asked if the deal fell through how does the town pay back the $700,000 and how much time would it have. Christlieb said the grant is considered closed out once Oakwood meets the job creation requirement. If it fails Oakwood Retreat LLC agrees to pay the town back.

Christlieb told the council the grant could also be proportional if fewer than 70 people are hired. Woody asked when are the funds released, on day one or when 70 people are hired. Christlieb said on day one.

The council approved signing the resolution and moving forward on the grant.

The council also approved accepting a quit claim deed for general utilities and road ways in Oakwood Park.