SPEEDWAY, Ind. — The developer behind a stalled hotel project in the town of Speedway is getting pushback from some town leaders and members of the community after not disclosing a previous fine.
The partially-completed hotel currently sits on the corner of 16th and Main streets right across from the Indianapolis Motor Speedway.
On Monday, the town council discussed the development.
“This is not a good look for this town or is it a good look for you guys,” said one community member.
“You guys should’ve seen this yourself in the first place. This is your job. This is what you are elected to do,” said someone else.
Last month, the town introduced a proposal for a $2.5 million short-term construction loan at the council meeting. The town’s loan originates through tax increment finance revenue.
The loan would help the new developer jump-start the more than $30 million Wilshaw Hotel project.
The proposed loan would be paid back with interest within three years at market or near-market rates. The loan is also contingent on the developer securing the remaining funding for the project.
The development team is HE Speedway Owner LLC and includes partners Hotel Equities and 33 Degrees.
The property is directly across from the main entrance of the Indianapolis Motor Speedway.
As the council debated the decision, new details about a partner with 33 Degrees were brought to light.
In May 2022, Virtua Partners was fined more than $2 million by the U.S. Securities and Exchange Commission.
On Monday, a representative from 33 Degrees explained the situation over Zoom and said Virtua Partners is a separate organization and will not be managing the project.
"The town is currently conducting further due diligence with our leadership, our legal team and our partners. We are continuing to explore the paths available to us so we can complete this project at a key corridor in our community," said Grant Kleinhenz, the town manager.
The council held off on voting on the proposed loan until fully understanding the situation.
Some in the community question why the SEC fines were never disclosed to the town in the first place.
“I see this as a huge red flag. They are not forthcoming with information. Seems to me they are not super trustworthy,” said a community member.
The hotel was originally supposed to open in 2018 after being announced in 2015, but that developer lost their financing.
If the town decides not to move forward with the loan and developer, they will need to file a lawsuit to acquire the property from the previous developer. According to legal experts, that could take years to complete.