Indy council approves bonds for $510M convention center hotel
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The Indianapolis City-County Council on Monday approved a plan by Mayor Joe Hogsett’s administration for the city to publicly finance and own a new downtown convention center hotel.
The vote was a crucial step in advancing the development of an 814-room Signia by Hilton hotel on Pan Am Plaza, which now carries a price tag of $510 million. The measure allows the city to take out up to $625 million in municipal bonds for the project, leveraged against revenue generated by the property, instead of existing or new tax revenue.
All 19 of the city’s Democratic council members voted to approve the measure, along with independent Ethan Evans. The council’s five Republicans voted against the financing. IBJ first reported expected results of the vote last week, after a poll of most City-County Council members.
The 40-story Signia is part of a larger redevelopment of the Pan Am block that is also set to include a $200 million expansion of the Indiana Convention Center.
Ahead of the meeting, the Hogsett administration provided City-County Council members a summary of a feasibility study for the project, authored by LW Hospitality Advisors. The study’s preliminary results, city officials said, indicates the hotel would generate enough revenue to cover expenses, debt service and various reserves tied to its day-to-day operation.
Copies of the study and the summary provided to council members were not made available for review by IBJ. City officials said the materials are not yet subject to public records laws because they contain confidential financial information and interagency deliberative material.
“The draft study will be finalized and made public later this summer as part of the bond offering for the project,” a spokesperson for the city said in a statement. “The city has shared summary information about the draft study with the council in advance of the full council meeting on a confidential basis.”
The bonds are expected to be priced and sold in late summer or early autumn, around the same time a groundbreaking for the project is expected to be held.
The hotel deal has been a contentious issue as Hogsett seeks a third term as mayor. His Republican opponent, Jefferson Shreve, has called the proposal a “flawed policy.”
Hogsett and other Democrats have defended the effort as critical to maintaining Indianapolis’ position as a convention destination. Hogsett shifted to the public financing route for the hotel after Indianapolis-based developer Kite Realty Group said it wasn’t able to get favorable enough interest rates on the private market to pursue financing for the project.
In a statement following the vote, Hogsett said he was appreciative the council voted to pass the bond measure.
“Today’s vote will help protect and expand the 83,000 hospitality jobs in our community,” the statement said. “It will increase business across our tourism economy and secure our spot as one of the top host cities in the country. Instead of sliding backwards through complacency, we are building a stronger, more vibrant downtown.”
While no councilors have publicly disagreed with the stated purpose of the hotel—to maintain and boost Indy’s convention business—council Republicans expressed concern about the city’s publicly-owned hotel competing with private hoteliers.
Minority Leader Brian Mowery is a member of the board that leads Visit Indy, the nonpartisan not-for-profit that markets the city for events. He told IBJ he understands the importance of getting the hotel built, but has “heartburn with the city being an owner of a hotel that is then competing directly against private industry owners.”