Source: Ratio and Kite Realty Group Trust / Ratio and Kite Realty Group Trust
INDIANAPOLIS — City leaders in Indianapolis have advanced a plan to build a massive new hotel downtown.
In order to build the Signia Hotel on what is now Pan-Am Plaza, city-count councilors on the council’s Metropolitan and Economic Development Committee have approved a proposal to borrow $625 million in bond money to pay for the project.
“Our developer partner, Kite, came to us and said they were no longer able to secure private financing for the project,” said Deputy Mayor Scarlet Andrews to the committee Monday evening. “That led us to a decision, a bold one, to pivot to a public project.”
Andrews said the city of Indianapolis would own the hotel with Hilton Hotels & Resorts set to operate the four-star hotel. She also noted that the avenue of using bonds to pay for the project would not result in any new taxes or tax increases for Indy City residents.
Sara Reardon, the newly installed city comptroller, added that revenue generated by the hotel will go back towards paying off the bonds.
Even with that clarification, some councilors were skeptical, like Councilor Paul Annee who asked Reardon if any general fund money would be needed as a contingency if the hotel failed to generate enough revenue to keep up with bond payments.
Reardon then reminded Annee that it’s up to the council to approve any general fund expenditures, to which Annee retorted that he was “well aware.”
Among those speaking publicly about the plan were those both for and against the project. Speaking in favor it was the National FFA, the Indy Airport Authority, and union construction workers.
Hotel owners, like Mike Wells who owns the Indianapolis Marriot Hotel downtown, were against it.
“Last week we sent our letter to the mayor’s office and the city-county council outlining our objections to his project,” Wells said. “We believe the proposal to use city funds and borrowing capacity to build and own the hotel is an inappropriate use of public funds.”
Wells called out the city for “becoming a competitor” with other privately owned hotels by proposing to hold ownership of the Signia Hotel. He added that their being in competition with each other while trying to work together to build downtown back up from the pandemic would not be conducive.
The proposal will now head to the hands of the full city-county council where it will have to be approved again.
