Submitted by J.A. Williams on Fri, 05/06/2011 - 14:45
In 1998 Hampton Inn Developers including John Helline were granted federal loans to open a Hampton Inn in Massillon, Ohio, But since that time the developers have been unable to make the annual payments on the $2.25 million in federal loans.
However Mayor of Massilion Frank Cicchinelli, has used taxpayer's money to make payments on the loans for the privately owned Hampton Inn. In 2010 Massillon paid $211,000 from it's federal Community Development Block Grant (CDBG), and to date has paid over $1.4 million dollars on the loan.

As posted on IndeOnline.com :
With unanimous council approval, the city took out a federal $2.25 million, 20-year Section 108 Loan administered by the U.S. Department of Housing and Urban Development. The loan can be used for “economic development, housing rehabilitation, public facilities rehab, construction or installation for the benefit of low- to moderate-income persons, or to aid in the prevention of slums.” The public-private partnership is known as Canalview Center.
Technically, the city does not make a mortgage payment; it pays on the loan. The city took out the loan from HUD, securing it with payments from the developer and the CDBG.
In turn, the city loaned $2.25 million to Downtown Massillon Hotel Ltd. The developer’s loan from the city is secured by a mortgage on the hotel property. The city is a second mortgage holder. A bank holds the first mortgage, which Helline said is being paid with private dollars.
To date, the city has paid $1,416,985 million using the CDBG, while the developer has paid the city $777,851. Of the $2.2 million paid so far from both sources, $1.5 million is on the principal.
Like the Section 108 loan, the CDBG can be used for a variety of projects that benefit low- to moderate-income areas. The city has used the money to pave roads, provide housing assistance and to support social service agencies, such as the Salvation Army and Boys andGirls Club.
At the time the project was approved, the city received more than $1 million for the CDBG, but by 2010 the city’s share was down to $789,000. Community Development Director Aane Aaby recently cut the proposed budget by 15 percent, a reaction to deep federal cuts to the program.

Essentially Cicchinelli is robbing Peter to pay Peter, but in 2010 Development Director Aane Aaby stated that the city would save $500,000 through 2019 when the loan will be retired. Aaby stated that current interest rates range from 7.5 percent to 8 percent, but could drop below 1 percent if refinanced. When the loan were refinanced last year, records show the city owes $380,000 of interest and $1.725 million in principal on the loan. It refinanced last year through HUD, saving $98,000 in interest over the final eight years. Saving only a fifth of what Aaby initially said the city would save.