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 GREENSBORO — A key Guilford County board won’t let a proposed downtown hotel move closer to federal stimulus financing without more information on its viability — including what bank will assume responsibility if it should fail.

“We would like to at least see a financial commitment from a lender,” said George Brumback, chairman of the Guilford County bond authority board. “Because then, we’re going to know it’s been vetted.”

Brumback’s group must approve the project before it can move on to the state Local Government Commission, which can then approve the project for federal recovery zone bonds.

The bonds were part of a federal stimulus package approved last year to spur construction, jobs and investment in communities.

The low-interest funding is privately backed; no local tax money would be at risk. 

“Before we kick the can down to Raleigh, we like to make sure we’re not sending something that won’t fly,” Brumback said at a review meeting Wednesday.

Brumback said he doesn’t want to see the project “get crucified” by the Local Government Commission. If that commission rejects the hotel project, the allotted bond money sanctioned by Greensboro and Guilford County — $27 million — would  revert to the state, not Guilford County.

State officials will want to know what bank or investment group will provide a letter of credit for the project, taking responsibility if it fails, Brumback said, so the bond authority would like the same information.

But representatives of the project at the meeting were reluctant to provide much more information.

Eric Pristell, a lawyer representing the project, said the group would be able to reveal which national hotel chain would act as the “flag” for the hotel by the time it goes before state review.

Pristell said there was no need for the county bond authority to scrutinize the project as closely as banks and investors ultimately will.

“You’re not an underwriter,” Pristell said to the authority board. “That’s not your role.”

Mike Weaver, whose business group owns the upscale O. Henry and Proximity hotels, was at the meeting and urged the authority to be cautious  before approving the project, which would directly compete with his own hotels.

Weaver and business partner Dennis Quaintance have spoken out about what they called  insufficient review of the hotel request by the City Council and Guilford County commissioners last month.

“You are elders in this community,” Weaver said to the board members. “The community trusts you to make good judgments.”

Weaver warned that should a downtown luxury hotel  fail — an independent study presented to the City Council last week suggests the business plan is not sustainable  — it likely would be bought by a less prestigious chain, sit empty or be demolished.

George House, part of the hotel project’s development team, said Weaver was out of line.

“I’m sitting here listening to my competitor lecture you on your responsibility not to let our project go forward,” House said.

House traded barbs with Weaver throughout the meeting. House rose to his feet after Weaver questioned whether the city would have to pay for improvements to the downtown area to make the hotel possible.

“This is the kind of gamesmanship we have to deal with every day!” House exclaimed.

The authority adjourned without taking any action but said it would meet again to hear more about the project.  That should allow the developers time to present enough financial information to move forward, Brumback said.

Mary Nash Rusher, a lawyer representing the authority on the bonds, said local bond authorities often rely on the Local Government Commission to do the heavy vetting for such projects. 

But Rusher said revealing financial backers and proving a project’s viability is a standard the authority uses in most industrial development bond cases.

Rusher said the caution was not unusual given that Guilford could lose any financing set aside for projects that don’t pass muster with the commission.

“It’s definitely true this whole process has been rushed,” Rusher said. “But traditionally, when someone comes to the authority, they are able to say how they’re going to be financed.”

Contact Joe Killian at 373-7023 or joe.killian@news-record.com