SPEEDWAY, Ind. — You may recognize the unfinished construction project on the corner of 16th and Main streets as what may one day be called the Wilshaw Hotel. The hotel’s finish date may not be it’s only problem.
Funding has been the main concern for contractors since construction began in 2016. The 128-room hotel was supposed to open in 2018, alongside a new apartment complex. The apartment was complete, but the hotel is still surrounded by chain-link fence and forklifts.
Speedway Town Manager Grant Kleinhenz says the town has proposed a 2.5-million-dollar short-term construction loan to help Hotel Equities 33 Degrees get off the ground.
“The problem there is that interest rates have increased, the market has changed slightly,” says Kleinhenz, “I know there’s new issues that have been broadcast nationally. All of those things have combined to make financing the project very challenging.”
Another issue is Virtua Partners, the parent company of 33 Degrees. Virtua was fined over 2-million-dollars by the United States Securities and Exchange Commission for a land deal gone bad in Arizona. Virtua decided not to fight the fines and settled, but that was enough for Hoosiers in Speedway to question the stability and transparency of Virtua.
“We continue to do our due diligence up to this point. We’re looking into all elements, not just the SEC issue but others as well,” says Kleinhenz.
The town of Speedway proposed a 2.5-million-dollar loan from its surplus to help 33 Degrees with development costs. The loan, which was not approved by the town council Monday night, would not be forgivable. That means 33 Degrees would have to pay it back on completion of the project.
Completion of the project, however, may not happen.
Kleinhenz explains, “I think that’s a real possibility. That’s something we’ve been fighting against for the past three or four years, trying to make it become a reality. Of course, there’s risk in any development deal, there’s risk that it may not come to fruition.”
He says it’s possible the project may have to be scrapped and turned into something else.
