Source: Ratio and Kite Realty Group Trust / Ratio and Kite Realty Group Trust
INDIANAPOLIS — City leaders in Indianapolis have voted to take control of a proposed hotel project that would see one of the tallest buildings in the city built on what is now Pan-American Plaza.
Council members on Monday introduced a measure that would authorize the city to borrow up to $625 million in bonds to pay for an 800-room, four-star hotel across the street from the Indiana Convention Center.
The price tag for the construction of the hotel is around $510 million.
The decision is getting a lot of backlash from hotel owners and workers in downtown Indianapolis who say the city gambling taxpayer money on a hotel project that is not financially feasible is a bad move.
“The private market obviously comes with a profit motive,” said Indianapolis City-County Council president Vop Osili in response on WISH-TV. “Us being a city that is not a focus that we’ve got.”
The project was originally a public-private partnership between the city and Kite Development. But, Kite backed out of the project after being unable to secure further financial backing for the project.
“This proposed gamble with public funds is inviting significant risk on behalf of its residents even though the private financial market has done its due diligence and determined the project is too much of a financial risk for support,” said the Downtown Hotel Coalition in a letter to the city-county council. “This all at a time when there are more pressing matters that are increasingly keeping visitors and conventions from coming to Indianapolis.”
The coalition is concerned that if the project falls apart the taxpayers of Marion County and the city would be left on the hook for the costs. Osili said he is aware of that concern.
“We believe, very strongly, that we are not going to get to that point,” Osili said. “We have that as a concern of some sort. We would be unwise not to, but we would not be going into this if there was that level of concern.”
Osili said committee hearings on the bond proposal could begin as early as Monday. The next full council meeting is scheduled for June 5.