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Council Committee approves $625 million in bonds to finance Pan Am Plaza hotel

Signia Hotel.PNG
Posted at 11:10 AM, May 16, 2023
and last updated 2023-05-16 18:46:21-04

INDIANAPOLIS — As of Monday night, the city of Indianapolis became one step closer to taking over the construction and cost of a downtown hotel project.

The Metropolitan and Economic Development Committee within the City-County Council voted in favor of a proposal to issue up to $625 million in bonds to finance the Signia Hotel portion of the Pan Am Plaza redevelopment.

"This project insures that we are not only retaining the conventions we have and remaining that top convention city in the country but we are also elevating our status in being able to attract even more, " Scarlett Andrews the Deputy Mayor of Economic Development in Indianapolis said.

The Signia Hotel is part of the larger effort to redevelop Pan Am Plaza and expand the convention center. Revenue from the hotel will be used to pay off the bonds. This means it will not require any new taxes for residents.

"All of the revenues that are generated by the hotel then go back in to the debt service model we are not responsible for paying off investors outside of the bond holders so that makes it a more viable project as well," Andrews said.

The 625 million dollar 40 story Signa Hotel would be ran by Hilton. It would add over 800 more rooms to the downtown area, and would create 400 more full time jobs. This investment is something Visit Indy says is necessary to grow convention business.

" Over the lat decade one of the key reasons we are having to turn away conventions is because we don't have enough space or dates," Chris Gahl the Executive Vice President of Visit Indy said. "So this project alone will allow us to go back to more then 200 conventions who have said you don't have enough space or hotel rooms. We can go back to them and turn the discussion back on."

The Indy GOP feels this investment is to risky and in the long run will cost tax payer dollars. They feel the city wasn't transparent about the project. During the meeting on Monday it was announced that city leaders knew the private company orginally looking for investors to build the hotel, weren't able to find the funding. The city found out in January. The Marion County Republican party support growing the convention business, but they say this funding method isn't the right move.

"So a private entity has had this land all this time hasn't been able to do anything with it and now the city is going to potentially pay they more then double what they got for it," Joe Elsener the Chairman for the Marion County Republican Party said. "So that is tax payer money first and foremost in the tune of, I've seen different numbers, but north of fifty million dollars."

Visit Indy estimates that this development could bring in 2.9 billion dollars over the next 10 years. They say that large conventions have already reached out about booking their convention at the Indiana Convention center is this hotel is built.

"It's important that we take this as a bold move forward or else risk losing conventions and meetings to other major cities who are building who are using this same financing structure and taking and trying to take business from Indianapolis," Gahl said.

During this development the Indiana Convention center would also be expanded. This will be the 6th time since it's creation it has happened.

An organization that represents most of the current downtown hotels spoke out against this proposal. They say there are already enough rooms in downtown Indy, and that most hotels are still recovering from the pandemic. This proposal will go before the full city-county council in June and the city hopes to have the hotel built by 2026.