Monday’s Indianapolis City-County Council vote supported Mayor Joe Hogsett’s idea to publicly fund and own a downtown convention center hotel.
The vote helped forward the $510 million Signia by Hilton hotel on Pan Am Plaza, which has 814 rooms. Instead of tax money, the city can borrow up to $625 million in municipal bonds for the project using property revenue.
All 19 Democratic council members and independent Ethan Evans supported the plan. Five Republicans opposed funding. After polling most City-County Council members, IBJ predicted the voting results last week.
The Pan Am block redevelopment comprises a $200 million Indiana Convention Center addition and the 40-story Signia.
The Hogsett administration briefed City-County Council members on LW Hospitality Advisors’ feasibility report before the meeting. City authorities stated the hotel will produce enough cash to meet expenditures, debt service, and reserves.
IBJ had no access to the study or council members’ summary. The files contain secret financial and interagency deliberative information, according to city authorities.
A municipal official stated, “The draft study will be finalized and made public later this summer as part of the bond offering for the project. “The city has confidentially shared draft study summary information with the council before the full council meeting.”
The project’s groundbreaking and bond pricing are scheduled in late summer or early fall.
As Hogsett pursues a third term as mayor, the hotel agreement is problematic. Jefferson Shreve, his Republican opponent, termed the plan “flawed.”
Hogsett and other Democrats say it’s crucial to Indianapolis’ convention status. After Indianapolis-based Kite Realty Group stated it couldn’t acquire favorable borrowing rates on the private market to finance the hotel, Hogsett went public.
Hogsett thanked the council for passing the bond bill after the vote.
“Today’s vote will help protect and expand our 83,000 hospitality jobs,” the statement stated. It will boost our tourist industry and cement our status as a top host city. Instead of falling into complacency, we are developing a stronger, more dynamic downtown.”
While no councilor has openly disputed with the hotel’s declared purpose—to retain and increase Indy’s convention business—council Republicans expressed worry about the city’s publicly-owned hotel competing with private hoteliers.
Minority Leader Brian Mowery is on Visit Indy’s board. “Heartburn with the city being an owner of a hotel that is then competing directly against private industry owners,” he told IBJ.