INDIANAPOLIS — The Metropolitan and Economic Development Committee voted 9-3 Monday night to move forward with plans to take over financing of redeveloping Pan Am Plaza, including a convention center expansion and building an 800-room Signia by Hilton Hotel.
The plan isn't new. It's been part of a larger expansion project to the convention center while adding needed hotel rooms to downtown Indianapolis for nearly a decade.
But now, that plan is pivoting from a developer-financed plan to a city-owned hotel after the developer hit a major snag.
"Kite came to us early in the year and said we cannot find private financing for the project. We looked at what other cities are doing. Over 25 other cities have already done this model of financing publicly these types of projects," said Scarlett Andrews, deputy mayor of economic development for Indianapolis. "And frankly, it allows them to issue bonds on a tax-exempt basis and to find that this is a project we can take on ourselves and have this comfort knowing it’s going to get done."
The council has already approved a $125 million project in TIF funds for the convention center expansion, according to Andrews. And now, the city will need to buy the site at Pan Am Plaza from Kite for around $50 million.
The Hilton hotel's $510 million price tag, plus additional funds needed for debt service reserves, will be backed and paid for by the hotel revenues themselves. That ensures taxpayers aren't on the hook for it.
Chris Gahl with Visit Indy said not going ahead with the project could cost Indianapolis in the long run.
"If this project doesn't take flight, we will absolutely lose convention business. We will stay stagnant, if not take steps back. And we don't want to do that for the important reason that 83,000 men and women depend on tourism for a paycheck," said Gahl.
Moving ahead with the expansion of the convention center and hotel has the potential to bring in $3 billion in business from new conventions, existing conventions and new tourism dollars for Indy over the next decade, according to Gahl.
The Metropolitan Development Commission will meet Wednesday to approve buying the site for the hotel. Then, the decision will go before the council for a final vote in June.
If approved, a groundbreaking would happen in summer 2023 with the Signia Hotel set to open in 2026.