After being denied funding from the city, the reconstruction project for The Edgewater Hotel on Wisconsin Avenue will begin the week of Nov. 19 with aid from the Midwest Disaster Area Bonds.

Robert Dunn, president of Hammes Company Sports Development Inc., said he filed an application for the bonds last year through the Public Financial Authority to aid in the $98 million renovation of the hotel. He said the banks providing the financing for the project were interested in applying to receive slightly lower interest rates.

According to Dunn, Midwest Disaster Area Bonds were put into place in 2008 by the federal government in response to flooding that occurred throughout the Midwest. He said the Edgewater Hotel is located in one of the areas that was designated for bonding.

The project is not taking funds that could otherwise be used to help disaster efforts such as Hurricane Sandy, Dunn said.

“There is no direct funding behind the bonds, so there is no federal money we are using that could have gone to [other] efforts,” Dunn said.

Dunn said he was disappointed in the city’s decision to not be involved in the reconstruction project of the hotel. He said it makes the project more economically challenging, but he added he is also relieved he no longer has to work through a process with the city.

Ald. Scott Resnick, District 8, said the reconstruction of The Edgewater Hotel will be positive for the city, even though Madison has refrained from funding any part of it.

“I’m glad the developer was able to make these decisions without the use of city resources,” Resnick said. “We have a very tight budget, and the developer was very confident in the project itself and was able to find funding from elsewhere, so I think it’ll be a strong investment to the downtown.”

Dunn said the project is eligible to receive $66 million in bonds; however, the banks will decide how much of the bonds they will use. He added there is no direct funding from the bonds, but rather they are used as a means of receiving lower interest rates from finances the project has already secured.

The program was set up to encourage development rather than restore destruction, Dunn said. He said the project is eligible because it promotes tourist spending, which was one of the industries that was largely affected by the flooding. He added the program uses bonds to help projects that create new spending to compensate for lost spending during the flooding.

Davy Mayer, an adviser to The Badger Herald Board of Directors and president of Capital Neighborhoods Inc., said certain people on the committee were concerned with Dunn’s proposal to apply for the bonds last year.

According to Dunn, the designs are currently being finalized for the reconstruction. The new plans include nearly an acre of public access to the waterfront and an outdoor area that will be used to host events in the summer and support an ice skating rink in the winter, he said.

“The new construction will dramatically enhance and reshape the downtown area,” Dunn said. “These new ideas are turning out to be everything we had hoped them to be and more.”

Dunn added the outdoor construction will serve as a complement to the Memorial Union and provide public access to the waterfront, which is something the public has limited access to now.

The construction for the project is expected to end by the summer of 2014.

Camille Albert contributed to this report.