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Indianapolis Mayor Joe Hogsett said this week he expects the Pan Am Plaza hotel and convention center expansion project to be delayed to give the city’s tourism industry time to recover from the COVID-19 pandemic.
Hogsett said the city is continuing to work with Indianapolis-based Kite Realty Group Trust—which is developing the project—to finalize a reworked timeline.
Current plans call for two hotels totaling 1,400 rooms and an accompanying $120 million, publicly-funded expansion to the Indiana Convention Center, along with a new pedestrian skybridge spanning Capitol Avenue.
“The legislative process should come soon,” Hogsett said. “But in terms of the delay (to the project) itself, we’re probably talking more months and not years. We are committed to going forward.”
While a final agreement would have to be approved by the Metropolitan Development Commission and City-County Council, it wouldn’t necessarily require Kite to begin construction right away.
City officials hope to complete the legislative measures before the end of the year, but it’s not yet clear if that will happen before the council begins considering the city’s budget for 2021—expected to start in a few weeks—or after that process has concluded.
Hogsett said the city and Kite “will move forward responsibly” even if that means making other changes to the project’s parameters. Some modifications have already been made to the timeline, including a July 2019 decision to build the hotels separately rather than concurrently.
As it stands, the hotel and convention center addition are expected to be completed by mid-2023, with the second hotel coming in a separate phase, likely completed by 2025.
“I think we’re always having conversation about where we happen to find ourselves today and how adjustments that need to be made should be made,” Hogsett said. “We’ll probably delay a second hotel for a year-and-a-half, two years.”
City officials have been negotiating with Kite since the firm was selected through an RFP process in October 2018, but those talks were temporarily sidelined in March as the city began dealing with the spread of COVID-19. Further delays have occurred in the months since.
The mayor said the city’s hospitality industry has gone through “a very difficult year” because of the virus. In fact, downtown occupancies were around 70% throughout 2019. In May, that figure was closer to 10%.
One hotel in the Pan Am Plaza development is expected to be an 814-room Hilton Signia, a ritzy convention center hotel, while the other would be a 600-room property with a lower price point. Before COVID-19 hit, downtown was expected to see a deluge of hotel development downtown, creating up to 4,200 rooms over the next five years. It’s not clear now where many of those projects stand.
He said while the city plans to give the market some time to adjust, there’s still a need to expand the convention center—making room for two large conventions to occur at one time—and more hotel rooms.
The mayor noted that while FFA and Gen Con, major perennial conventions for the city, canceled this year’s in-person events in Indianapolis, both groups also extended their contracts into future years.
Hogsett said he generally doesn’t expect Indianapolis to stray from its historical approach to hotel development, which has been to add rooms in hopes of attracting larger conventions.
“We are thinking big and we are thinking long-term, rather than to recede and hide,” he said. “It’s easier said right now than done, but I want to remain aggressive in terms of the future.”
Added Hogsett: “It’s important for me to underscore that we remain committed to the development of the Pan Am Plaza.”
Chris Gahl, vice president of Visit Indy, said he hopes the city continues pushing forward with the project on its original timeline, since “a project of this size doesn’t happen in a few weeks, but takes years to complete.”
He said the project is integral to the city’s post-COVID-19 recovery efforts.
“We’re still committed to the fact—based on customer feedback—that expanding the convention center, while adding rooms to Pan Am plaza is extremely critical to our recovery post-COVID,” Gahl said. “For Indianapolis to remain healthy, we have to look toward the future. Part of our long-term recovery strategy is to ensure large conventions can continue to convene here.”
Kite Realty Group did not return a call requesting comment.
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Visit Indy acts like there won’t be significant changes to the convention and travel businesses resulting from COVID19. That seems unlikely in the short to medium term.
So unfortunate. Sadly this project will very likely come out severely changed and reduced, and not nearly as impressive as the original renderings reveal. This seems to always happen to Indy’s big developments. Stupid virus. But small potatoes compared to the lives lost and all those infected.
And im not even blaming Hogwash, this time.
i think Indy definitely needs to be ready and fully capable of attracting larger conventions time this pandemic passes over. Indy doesnt want to be caught on the sideline trying to play catch up with competing cities. indy has a healthy lead on Louisville,Milwaukee,Kansas city and other midwest cities. the pandemic is going to do whatever its going to do and it has effected every city,so the only thing Indy can do is go full steam ahead and be ready if and when all this is over.Either the economy will recover or it wont.Indy cant afford to just sit idle and passive while turning into a ghost town.