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I was on the City-County Council and supported the funding package for the Indiana Convention Center expansion back in 2019. That proposal was consistent with successful public-private partnerships in the modern history of Indianapolis. The proposal included a hotel developer that would invest equity capital to support private debt financing. This is how real estate development works—and it’s a skill set required to grow our downtown.
What Mayor Hogsett now proposes for Pan-Am Plaza is not that kind of deal.
The ability to attract market-rate financing is the acid test of a viable development. Yet, the city is proposing zero owner capital and zero commercial debt. Just taxpayer money.
It is terribly misleading for the mayor to sell this to the public as a financing plan. The city isn’t just proposing financing—it is proposing to become the owner of a massive hotel. Assertions that this project is like the Hoosier Dome or Circle Centre Mall are simply false. Those were stand-alone city assets without competitors. And it must be noted that any “alliance” of supporters is mostly people who rely on the mayor’s support to hold their jobs.
Sadly, this proposal is a political ploy to obscure the reality that downtown cannot attract private investment in its current state. The mayor cannot keep our convention visitors safe from violent crime, and vagrants pestering residents and visitors alike continues unabated.
Now, having run the city up to the edge of this cliff, the Hogsett administration has the audacity to threaten to blame opponents if the deal collapses. This might be a legitimate criticism if we were considering some fantastic new opportunity. But not after dawdling for years.
The only ones to blame are the people who let four long years pass without progress. And before they propose COVID as their excuse, let’s all agree that a mayor with foresight would have used the effects of the pandemic to hammer this deal home. Interest rates and construction costs were at rock bottom in the summer of 2020. The moment was ideal for bold, ingenious action. But nothing.
City government has no business going into competition with private hotel owners who have been partners in building our downtown convention business. If financed purely with municipal debt borne by Indianapolis taxpayers, this hotel will have an artificially low cost structure, enabling it to compete unfairly against other hotels. Our city needs to attract private investment, not run it off.
Amazingly, Hogsett’s deputy mayor for development touted this socialized structure as a benefit, saying in IBJ the hotel would have a good chance of repaying the $625 million in bonds because the hotel will be city-owned and therefore won’t need to generate a profit.
Seriously? The deputy mayor for development is proud that the city will use its nontaxable status to compete unfairly with private investors who have put hard dollars into our city? Hopefully, it is becoming clear to voters why the Hogsett administration is not competent to lead an Indianapolis revival.
The only reasonable attempt to rescue this project at the last minute would have been to offer all downtown hotels a pro-rata ownership interest in the project, with a temporary mechanism to protect existing hotels from profit destruction due to oversupply of rooms as we grow into the next level as a convention city. But this requires a level of experience, sophistication and creativity that is not present in the Hogsett administration.
We need to expand our convention facilities. We need an additional convention hotel downtown. And we need a new mayor to lead this effort.•
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Shreve, a Republican and former city-county councilor, is running for mayor of Indianapolis.
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Shreve is right about this “plan” of the city. I hope Hogsett’s plans are not realized as it would be a huge mistake.
Shreve’s. Campaign photo graph looks like an impish 3 year old just caught doing wrong by his mom.
Wow; such an erudite comment that adds absolutely nothing to the discussion.
Well, Dom, with half a billion dollars he could buy a better toupee.
Couldn’t agree more with Mr. Shreve.
So Shreve just announced that the leader of every organization that supports this effort is fired if he becomes mayor.
Claiming now, three years later, that this hotel could have been financed in the Summer of COVID is disingenuous at best. There’s no way to know that. And, on it’s face the proposition that a bank would have funded such a project when the entire tourism industry was shut down and no one knew how the pandemic would play out is preposterous.