Developers oppose vote on Downtown hotel deal  

burke-and-others-answer-questionsA city vote would delay the planned downtown convention hotel and endanger the entire project, developers told the city council Thursday.

The business session briefed nine new council members who were not part of a July vote approving the $311 million, 800-room hotel.

It came after opponents collected more than the 1,700 initiative signatures needed to force a public vote on the issue.

City attorneys say the petition is legally flawed because of a signed contract between the city and the developers of the Hyatt Hotel. If the city were to back out of the deal, officials said Thursday, it could cost it many millions of dollars if the developers sued.

So many new council members suddenly found themselves under political fire for a project they knew little about.

City Manager Troy Schulte provided a primer:

The city has strived for more than a decade to put together a deal for such a hotel.

Previous developers wanted between $75 million and $130 million in city cash.

After several years of negotiations, this deal took shape that involves about $50 million in city money from that already being spent for Kemper Arena from a tourism fund.

That $2.2 million per year cost expires next year and the money would go toward the hotel for 25 years. No money is to come out of the general fund that goes for things like police and firefighters.

The city also would donate land (valued at $4.5 million) for the project on the block bordered by Wyandotte Street, Baltimore Avenue, 16th Street and Truman Road.

The project would get 30 years of property tax abatement, but there in currently no tax income from the land

The city also assumes no risk if the hotel fails financially, said Schulte, who called it the best deal available and a tribute to the economic vitality of Kansas City.

Ronnie Burt, CEO of Visit KC, said the city – with help from the hotel – has already booked four large conventions after the projected 2018 hotel opening date.

Before a shovel has turned dirt, he said, “It has already proven to be and will be a game changer.”

Steve Rattner, a finance expert involved with developers, said a six-month delay for a vote could lead to higher construction and financing costs and endanger the project if the economy collapses.

“The deal is not going to get any better,” he said. “It can only go away.”

As for the signed city contract, he said, “a contract that is signed is a word of your bond.”

They plan to secure financing as early as December and break ground early next year, Rattner said.

Councilwoman Heather Hall asked that if a convention hotel was such a good thing why didn’t developers do it all with their own money.

Burt said such projects are not done nationwide without public help.

Mike Burke, a former councilman involved for years in shaping the hotel deal, said it would create 1,300 construction jobs and up to 400 permanent hotel jobs.

Councilwoman Alissia Canady asked him if developers would sign a contract pledging to hire up to 30 percent them from the local work force.

Burke said, “I’m in agreement with the goals – how we get there we’ll need to work out.”

Canady said, “I’m going to keep making that ask.”

Dan Coffey is leader of the conservative citizen group that raised the petition signatures to force a hotel vote (and also opposes the streetcars and a new KCI airport) told the Kansas City Star Thursday that “There’s nothing to lose by having a vote” on the hotel project.

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