The city of Indianapolis is poised to take over a planned hotel project that is part of the convention center expansion. The proposal now moves ahead without bipartisan support.
At a two-hour Metropolitan and Economic Development Committee meeting this week, a presentation laid out the $625 million plan to take over the construction of a new hotel on the site of the Pan Am Plaza.
Kite Realty, the original developers, informed the city earlier this year they were unable to secure funding.
The city will buy the land and own the hotel, which is a key part of convention expansion. Deputy Mayor of Economic Development Scarlett Andrews said Indianapolis has a history of hospitality.
“This is the next bold move to keep Indianapolis the top tier of host cities in the country, and without this project we do not get to stay in that ranking,” Andrews said.
Andrews added the project will not increase taxes for Marion County residents.
The development plan now includes two projects. The original convention center plan included $50 million from the Capital Improvement Board, $25 million from the City-County Council and $125 in TIF funding for the construction. Now the city will move ahead with a new bond package and take over hotel ownership.
The city and other tourism officials said without the development, Indianapolis could lose hundreds of millions a year as conventions move to other cities.
City Controller Sarah Riordan said the proposal is financially sound.
”Financing of the construction of the hotel will be structured in such a way that the operation of the hotel will be paid for with the revenues of the hotel,” Riordin said.
The move did not come with Republican support. Council minority leader Brian Mowery expressed concern about public ownership.
“I have a lot of concern with the city saying we're going to be the owner of a hotel,” Mowery said.
Public comments included pushback that the new deal creates an unfair market. Mike Wells is president of REI Investments and a Marriott hotel owner.
“We have a long history of working with the city to grow our convention business but now the city will become a direct competition,” Wells said.
Others who testified pointed out that the hotel and expansion does not only benefit downtown. Roberta Tisdel with Visit Indy and said more than 80,000 people make up Indianapolis’s tourism industry.
“They may work downtown, yet they take their paychecks back home and live in townships across the entire county – they live in all of your districts,” Tisdel said.
The full City-County Council will vote on the proposal next month.