City’s big bet on a publicly owned Signia by Hilton worries other hoteliers

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23 thoughts on “City’s big bet on a publicly owned Signia by Hilton worries other hoteliers

  1. Ah Mike Wells. Of course. He skwaked the same way before the JW Marriott was built. So he doesn’t want competition? Then get out of the hotel business. Very supportive of Mayor Hogsett doing this.

    1. He is right. The government should not be competing with the private sector.
      Your personal attacks don’t change that fact.

      It is a legitimate concern of his and others that are competing.

      That said, the Hilton MUST must realize solid profit margins
      to hire and retain qualified staff, and to maintain the property to
      the highest standards possible. Otherwise, convention planners will
      not chose Indianapolis.

    2. Indianapolis was in to deep to turn around. They must follow through.
      The city was also in danger of not being competitive if the project does NOT go
      through.

      That is something that Mr. Wells needs to consider also.

    3. KEITH B. the only issue I have with Wells and others against the government getting involved is two things. One, why didn’t White Lodging build a new hotel or any other hotelier for that matter? Second, Atlanta and Orlando both has done the same financing strategy to get their Signia hotels built in their respective cities. So this process is nothing new and has been used by several cities nationwide. It’s just a new way of doing business in Indy. I just feel if Wells and the other hoteliers don’t have an alternative solution, just complaining and not building something to take its place is pointless. Indy is on a road of no return. Gen Con, FFA, the Fireman, Police convention all only signed on to stay in Indy if this project is built with the convention expansion. So if these conventions leave Indy, what would Wells and the other hoteliers do then? Isn’t it Visit Indy’s job to bring conventions to the city to help fill rooms for ALL the hotels downtown? If these project isn’t built, it would be business suicide for all the hoteliers.

  2. Just get the project completed to retain the vital convention business and then offer the hotel for sale back to the private sector and use the proceeds to payoff the bonds.

    3 years from now rates should have normalized and the hoteliers who are upset now can simply buy the darn thing from the city.

    The project just has to get done. Force it through by any means necessary and figure the rest out when it’s done.

  3. Awwww…do these hoteliers need some cheese to serve with their whine?

    Hoteliers in this city have been living large for three decades. To some degree, due to city incentives and breaks.

    The larger hotel and ConvCtr are needed to stay abreast of that huge economics engine called conventions. The end-result is; finish the hotel, expand the ConvCtr, and then sell the hotel to the private sector. Perfectly solid proposition.

    1. When did the job of the city become competing with local companies using taxpayer dollars?

  4. I am in support of Mayor Joe Hogsett’s decision. The project will elevate the city’s reputation as a convention city and all of us will benefit from it.

  5. The entire project is being pushed so the convention center can get their additional 50,000 sq ft ballroom! They are using the city and the hotel to get it built! They know the rooms don’t make since for the city. The hotel occupancy in the city for this year is 58.7% after the first quarter. This is after finishing 61.7% for the entire year in 2022. That doesn’t sound like a city that needs another 814 rooms to sit empty. If the convention center wants the ballroom space, built the ballroom space with the money and leave the hotel rooms out. It would definitely be a cheaper venture. Currently the entire argument is to build a new hotel for 9 nights of business (3 conventions mentioned) so that the ballroom space gets built. Have you every heard the phrase, building a church for Easter Sunday? Come on Indy, you are better than this!

    1. Patrick,
      Good point regarding the over saturation of hotel rooms.

      There are still more hotels coming online. I’ve wondered if the city can
      handle that many new rooms. And that’s be before the new Hilton tower
      gets built.

  6. If the hotel is such a great idea (especially given Indy’s low avg. occupancy) then private enterprise would be doing it. But they’re not. One must wonder what politician’s brother-in law is up for a contract?

  7. Municipal governments get involved in the business of owning hotels when they are trying to come up with solutions for increasing economic activity in and visitation to their city. However, as experts will consistently state …. “if the private sector isn’t interested in making the investment for whatever the reason, cities should dig deep for answers and actively practice caution”. Simply stated, “if no private enterprise wants to undertake the Development Project for whatever reason, red flags should be waved and a reality wake up call needs to be rung load and clear to the Government Officials” . Maybe Indianapolis and Marion County can tolerate a zero return in the first few years, but Government Owned Hotel Properties, most of the time, find themselves losing real money – one to tens of millions of dollars each year, which unfortunantly happens most of the time when the environmental conditions are not perfect.

    There are a few instances where city-owned hotels make sense, especially if private and public companies cannot keep up with demand which cities in the South like Miami find themselves today. However, if a city environment is shrinking and deteriorating beyond what Investors deem tolerable and acceptable, the hotel market in such an area will have extreme difficulty making the numbers work to obtain money from private investors (this is not a new concept … look at the City Center Mall). And if a city is not in a position of strength, as they find themselves with Kite, the decision to build a hotel, needs to include a complete cost analysis that not only looks at the financial feasibility of the Hotel, but also the supporting businesses required to attract major conventions to the City – a substantial hurtle given the empty and boarded up buildings in the downtown area …. 23 high end restaurant’s closing downtown is not a plus. And finally, to draw in major conventions, the Airport Authority needs to change its leadership to promote and support the development of more direct flights by the three major carriers, on aircraft that seat more than 75 people. Professional associations look at multiple factors when selecting a city for a convention …. hotels are important, but so are a lot of other factors that the current city analysis seems to not address or take into consideration …. $600M+ is just the tip of the iceberg!

  8. Dominic is exactly right! The 2 examples they gave in Atlanta and Florida are not even open yet! The one in Colorado has a ‘transparency’ problem (aka money loser) and the one in Baltimore has rarely turned a profit and cost the city 16 million dollars in debt payment per the article. Anytime the government gets involved in the private sector (because this now becomes a prevailing wage job), all costs go up so the savings in interest or bonds will be a wash. But let’s keep voting for Hogsett because he has made the downtown area so much better during his tenure, lol.

  9. Wells and White sure didn’t mind taking government subsidies when they developed the JW. True of about every other hotel and certainly every parking garage built Downtown in the past 30 years.

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