Colts' Irsay touches hot button with hotel issue

May 1, 2012
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The city of Indianapolis and its tourism and convention people have a problem. And it might be more immediate than it seems.

Here’s a news flash: The Super Bowl isn’t coming back to Indianapolis unless another big, posh hotel is built downtown.

That may be news to local citizens, but it’s not news (or it shouldn't be) to the mayor and the folks at the Indianapolis Convention and Visitors Association. And it’s not news to Indianapolis Colts owner Jim Irsay.

I’m sure the honchos in the NFL’s ivory tower in New York will bristle at that notion. Problem is, they don’t have a say on where the Super Bowl is played. The 32 team owners do.

And nobody locally has a finger on their pulse like Irsay. After all, he’s one of them. So Irsay tweets that the city needs another big downtown hotel to land another Super Bowl and takes a bunch of arrows for his assertion.

Then, this morning, he clarifies his earlier tweet with this: “When I went to r SupBowl Com. Meeting, which I'm on, feedback was extremely positive ... the “hotels” comment wasn't my observation. It was others.”

I cleaned up Irsay’s grammar just a little, by adding a period here and a space there. But the wording is exact.

So who are these “others?” You don’t have to be Irsay or part of the NFL’s Billionaire Joy Luck Club to know what and who he’s talking about. They are the only “others” that matter. They’re the NFL owners.

After spending a week in the Super Bowl media room talking with myriad NFL insiders and a few team owners it became clear to even me that the 32 people who matter most more than want another hotel in downtown Indianapolis, they’ll insist on one before bringing their precious Super Bowl back to the Circle City.

If Indianapolis decides not to build another major downtown hotel, the NFL will simply take all our best ideas—the Super Bowl Village, zip line and centralized party zone—and ship the game to cities willing to meet their demands.

After attending the 2011 Super Bowl in Dallas—where media, fans and NFL officials were spread all over creation—I’m not quite sure what the gripe with Indianapolis’ hotel situation is.

Nevertheless, the NFL owners hold all the cards. Irsay understands that as do Indianapolis leaders.

But ICVA CEO Leonard Hoops realizes too you don’t build a church for Easter Sunday. Well, unless the Easter collection is enough to support the church and its building year-round. With an economic impact north of $300 million, it takes a big collection basket to hold all the Super Bowl's bounty. And who knows, you might attract some new worshippers with that big, fancy church.

Hoops’ predecessor Don Welsh said downtown would need a big, new hotel by 2015 despite the opening of the 1,005-room JW Marriott in 2011. I suspect he said that for folks like NFL owners and big convention planners as much as anyone. Welsh feared that the appearance of standing static might send big-time event planners scurrying in another direction. And Welsh, who has since departed for Chicago, was certainly a big-game hunter.

Hoops is more conservative, saying he’d like downtown hotel occupancy to consistently post above 70 percent before starting a new hotel project. Although rates in 2012 might end up in the 70s, Hoops said, “it will be skewed from this year’s Super Bowl.”

In 2011, downtown hotel occupancy was 66.4 percent. It surprised many hoteliers that the occupancy rate increased from 65.3 percent in 2010 despite the JW’s opening.

But it’s a delicate balance, and most hoteliers right now think another big downtown hotel would tip the scales in the wrong direction. Welsh would argue that if you build it, they will come—and the JW is the proof.

Suburban hotels, which had 57.5 percent occupancy in 2011, might feel an even bigger impact as more business is flushed downtown. But I’m not sure the numbers back that up. Their occupancy rate in 2010—the year before the JW opened—was 54.8 percent.

There’s a small handful of downtown parcels that could be the site of downtown’s next mega-hotel. The Pan Am Plaza is chief among those, and its future development is controlled by commercial real estate developer Kite Realty Group Trust, which was responsible for the ritzy Conrad Indianapolis. They’ve been mum on their plans for the property.

A new hotel on the site will almost certainly require some serious infrastructure cooperation—and perhaps even some kind of financial support—from the city.

So what is Indianapolis to do? Is it time for a conservative approach, a prevent defense of sorts? Or an all-out blitz? It’s a difficult question.

This much is certain. For a big hotel, it would take about three years from conception to ribbon cutting.

Any Super Bowl bid without such a hotel would have about as much chance at succeeding as a team led by Curtis Painter.

The clock is ticking.

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  • product of Indy's success
    I should have pointed out in the blog post, that Indy might be a product of its own success. I think local Super Bowl Host Committee members were so successful in creating an exciting, vibrant downtown, more of the NFL sponsors, big-wigs and other movers and shakers wanted to be in the epicenter of it all. Indy has 7,100 downtown hotel rooms.
  • Tick, Tick, Tick
    Yes, the clock is ticking.

    The clock is set at 90 days after the Superbowl to land a large new convention and/or jobs announcement somehow connected with this very large public expenditure for one football game.

    So far all we have received is empty promises and no full financial accounting of the events success or failure.

    Don't forget taxpayers built a $750 million football stadium and this SuperBowl was promoted as a reward.

    Is a reward hosting a money losing event?

  • Hey Jim, Read This
    It's a free market.

    Why doesn't Jim Irsay put his money where his mouth is and step up and finance a new luxury hotel himself?

    Can't think of any investments he has made into the community that has made him a billionaire.

    The Simon family has put him to shame in that respect.
    • Other comments
      Suprised to see the article comparing the occupancy numbers to 2010, when everyone in the hospitality industry knows that was still in the midst of the recession (especially in hotels). So not really a fair comparison. And with the closing of the University Place Conference Center and Hotel this week (a very nice 4 diamond downtown facility), can't imagine the city supporting more hotel properties at this point. There is not enough business to go around right now, especially in the times we don't have a "citywide" event.
    • Good-bye PanAm Plaza
      The City has been waiting for the 'push' to take the PanAm Plaza and convert the site into a Hotel complex. It is the last choice parcel close to the ICC and even with the Super Bowl it still is crumbling before our eyes. I see the city moving it very soon.
    • Sustainable Competitive Advantage
      Maybe light rail from the airport to a downtown multimodal hub should come before another large hotel.

      Look out Chicago, Minneapolis, Cleveland, Portland, Charlotte & Seattle.

      • Hotel Issue
        It doesn't help that the University Hotel will be converted to student housing.
        • Figure Out Your Strategy
          Hotels are only an issue if you go for the big events, and my guess is light rail woud bring in a stream of conferences that in total would add up to more than another SuperBowl. Better strategy for us that going after another Superbowl (and getting the bad weather bullet we missed) ie. use the Superbowl success as marketing to get the other conferences. We have the perfect downtown for this. Make it easy to get to and from the airport and you have an excellent conference town. Enough entertainment, but not so much it distracts from business.
        • Indygirl
          My sentiments indeed.
        • trade one hotel for superbowl
          what kind of a moron would build a hotel in the hope...i said "hope", that it would bring another superbowl to the city? well, certainly not a hotelier...unless the city said it would subsidize it. sorry, i am well past using my tax dollars to subsidize a private venture. build it and they will come mentality. anybody want to invest their "own" money on that premise? i don't think so.
        • More hotels
          Big Motel 6 might work or even a themed hotel like sybaris...that will bring in the tourists and hookers. They gotta sleep somewhere.
        • Re-open a Bankrupt Hotel!
          Back in February it was announced that the owners of the practically new Comfort Suites adjacent to Lucas Stadium were filing Chapter 11. Just this past weekend University Place announced it was being converted to a dorm and classrooms. Both did so because there is just not enough business for them. Then we have the Dolce Hotel in the North of South Project that the city is funding due to the inability to find private financing. Too risky????

          If people want to spend money on watching sports in their spare time let them do it but quit picking my pocket for your entertainment.
        • New Hotel
          If Indianapolis does indeed need a new hotel to lure another Super Bowl, and if Mr Irsay is convinced of such, he is in an excellent position to risk his own capital, rather than that of the taxpayers of Indianapolis who already commit significant funding to ensure Mr Isray's profitability.
        • University Place
          Colt's Fan- University Place is being converted because they have lost money over the past 6 years and not because they want to ruin Indianapolis' chances of seeing another Superbowl.
        • Conference Center Mecca
          Plus if you haven't noticed in this economy funding for conferences is usually the first thing to go. Investing in making Indianapolis a conference center mecca is a waste of time and effort. We are a day late and a dollar short.
        • Jim Irsay's response
          Jim Irsay called me to clear the air about the post-Super Bowl response he received about the city and the downtown hotel situation. I will post an updated (new) blog post tomorrow explaining all of that. So please stay tuned. And thanks for reading.
        • A Hotel in the works?
          Wait a minute, wasn't there supposed to be a new hotel built on the site of the RCA Dome? That was part of ICC's grand plan and was even supposed to connect to the then-planned Lucas Oil Stadium via sky walk! What happened to that plan?

          I'm in agreement that if Irsay wants a new hotel to entice another Superbowl then he can afford to underwrite it more so than the city.
          • It's not too late...
            Intercontinental Hotel. Pan Am Plaza. Now.

            Jus' sayin.
          • Tired of the Politics and Play
            It seems the citizens of Indianapolis as well as the entire state has been funding poorly built sport structures and airports the are rusting, leaking and have to have other repairs of fixes so early in their life. We insulated the Field House walk way to the garage, seemed to need repainting prematurely, had to fix the front slabs leading into the field house. Lucas Oil had leaks, grass breakage, technology equipment getting wet and we apparently could not keep the word Lucas lit on the building more than half the time. He should get a partial refund for partial advertising. I went to a Home and Garden Show there and the staff was too lazy to pick up blowing trash in the door ways and the signage was pathetic. Who paid for the baseball stadium?

            We get new parking meters that don't work and have to pay more to park to cover all this maintenance. We have had several sales tax increase and how much was wasted on the property tax debacle. We pave our streets and then three months later we have the water and gas companies cutting gaping holes into the fresh pavement and they do a pathetic job of patching the holes and do not seal around the edges so water can run through the gaps and pop up to make pot holes. Does the DOT think of working with others on project scheduling? I have seen this in too many places.

            If I am not mistsken we let some federal money expire and may let even more expire that we desparately need for our public safety.

            How much waste must we watch as it is to easily taken from the citizens. Have we ever heard of evaluating our budgets and putting the money were it should go or is our City and State turning into the postal service who up until recently bragged they never laid anyone off and now we are bailing them out.

            Mr. Irsay: Please put up your beautiful hotel that your helicopter can land on and your limo can be sitting there waiting. You can also use it to give pink slips to some of our medium paid players who pack a punch and work their tales off for you and the city so they can do the norm and go to another team and defeat us. You let a GM go to a team in the same division and to a team we always struggle with and he did pretty good on his draft this past weekend.

            Tired of the waste! Put some of your money up and quit dancing around our local goverment who gives you a new stadium and half of the concessions proceeds.

            Have a good day sir!
            • Awsome Put Up To Shut Up
              Wouldn't it be great if Jim Irsay told his haters that he plans to build a 1,000 room Intercontinental Hotel with Kite Group?
            • A few reasonable points...
              1. Despite the comments from many here and elsewhere, I've never once heard Jim Irsay say he WANTS Indy to build a new hotel or even thinks we should. He's merely passed along the feedback that he's received that if want to be a serious contender for another Super Bowl that is our biggest weakness we would need to address. He's not demanding anything at all.

              2. The decision to pursue another large hotel may or not make sense. It's silly to think this is something that there is an instant and easy answer to. It's not a decision that needs to be made immediately. Give things three or four years and see how our hotel and convention business is doing once we've gotten back to a normal economic environment and had time to better gauge the impact of the convention center expansion and the JW Marriott complex. It will be a lot easier to make this decision in about five years than now. Plus, the odds of a Super Bowl returning in much less than eight or so years are almost nil anyway. This is either a good move for the city and it's convention/tourism business or it's not, regardless of another Super Bowl.

              3. The IUPUI hotel and the Comfort Suites closure/bankruptcy have little relevance to this. We, I assume, are talking about another major convention hotel in the heart of downtown with at least 500 hundreds rooms and an upscale brand. The IUPUI hotel failed because of poor location and lack of name/brand marketing. It was really stretching things to even call this hotel downtown. What kind of convention planner would put their people way over at IUPUI in a no name hotel when all the action is in the center of the city?

              4. Investing BILLIONS (and don't kid yourself about the cost it's extremely expensive and always a loser on the balance sheet...especially for cities with low population density like Indy) in light rail would have a horrible return on investment relative to how much additional convention business it would bring. Getting from the Indy aiport to downtown isn't a major holdup in booking conventions. A lack of direct flights to and from Indy is a bigger issue for business than putting people in a town car, cab, shuttle, etc. vs a choo choo. With a lack of highway congestion and relatively low cabfare it's pretty easy to get from IND to downtown vs most major cities.
              5. It's laughable that anyone would expect to see some sort of economic bonanza from the Super Bowl from new convention business, etc. within 90 days of the game. The game brought in a lot of money that week to Indy and is part of our long term branding strategy. It's yet another piece of the puzzle as Market Square Arena, the Hoosier Dome, Pan Am Games, Circle Centre, etc. were. You need to wait ten or twenty years to really guage the impact of things like this.
            • Has everyone gone nuts??
              An NFL team doesn't profit from a Super Bowl in its home town, and I know for a fact that Irsay paid $1 million to help bring the game to Indy. The NFL controls all revenue produced by the game, including suite sales, ticket sales, sponsorships, etc. I don't hear Irsay telling us to build a hotel, he is saying others told him hotel rooms were an issue. And I would assume this is true.
              Also, "Tired of It", who is the GM you are talking about? Chris Polian? Bill Polian? Neither of them are with an NFL team at present.
            • Truth Hurts
              IndyTodd,

              1) Jim Irsay deals in innuendo. Last time he indirectly mentioned LA & the Colts, we built him a $750 million football stadium. If he really believes we need a new 1,000 room convention hotel to get more business, than he is more than capable of getting the deal done himself and showing the community his commitment and gratitude.

              2) As IBJ's Anthony Schoettle pointed out in his article, the next big convention hotel decision is not as far out as you may think considering it's three year planning and construction timeline.

              3) The IUPUI hotel and the Comfort Suites closure/bankruptcy do have relevance to this. The IUPUI hotel hosted the New England Patriots for the Superbowl and the Comfort Suites were built with Lucas Oil Stadium in mind. That being said, I think student housing for the IUPUI hotel is a great idea considering its location and backlog of student housing requests. The Comfort Suites will eventually be successful, once the area around it is redeveloped similar to Wrigleyville or the plans for the area surrounding the Indianapolis Speedway.

              4) Yes, the proposed X light rail system running from north to south and east to west will cost millions to connect the airport to downtown the cities shopping malls, hotels, convention center, sports stadiums, attractions, etc. Keep in mind roads don't make money either, however, just one planned intersection at I-69 and 465 is expected to cost $600 million.

              5)It's not laughable that anyone would expect to see some sort of economic bonanza from the Super Bowl from new convention business, etc. within 90 days of the game. The Superbowl planning was going on for years before the event and many pieces of the puzzle are in place before the event. It's not too much to expect a financial return on this event. In fact, ICVA's President was quoted in the IBJ after the Superbowl, that he had several big deals in the works because of the SuperBowl and he would know the outcome of negotiations within 90 days. No one is buying this story that we need to wait five or ten years down the road to see the benefits of these huge investments. Ten years of promises have now come due.

              It's time for Jim to back his words with action.
              • Move Hotels to Downtown
                If the case is just that the big-wigs wanted to be up-close to the Super Bowl action, then destroy an older hotel near the outskirts and "rebuild" it closer to wear the Bowl people want to be.
              • Nothing like embelishing...
                "Tick Tick Tick", when did Jim Irsay demand a hotel? And when did Jim Irsay mention a 1,000 room hotel in any sense?? And when did Lucas Oil Stadium become a "$750 million" stadium? And when did we build "him" a new stadium? And I think a lot of people on the near eastside believe the Super Bowl was a worthy investment.
              • Truth Hurts
                Marie,

                The vast majority of the new near eastside housing and Georgia Street renovation was funded with federal tax dollars.

                Mark Miles taking complete credit and embellishing the NFL/Super Bowls contribution is the true travesty.
                • Truth Hurts
                  Tick, Tick, Tick-

                  1) Jim Irsay had a tremendous amount to gain by leaving the door open for a potential Colts move to LA before Lucas Oil was built. He got an absolute sweetheart stadium deal that will bring him tens of millions (if not hundreds) more over the next 30 years than if he had not left open the possibility of relocation. He held all the cards in that negotiation and benefitted tremendously. Now, he has relatively very little financially to gain if Indy gets another Super Bowl. There really isn't much connection between these two things.

                  2)There is absolutely no need to make any decision anytime soon on whether or not to build another major convention hotel downtown. As the column today points out, you need to get above 70% capacity for multiple years before you even think about that. You aren't going to build a hotel that the city absolutely doesn't need just for one Super Bowl weekend if there isn't at least a chance the market can sustain it the other 99.99% of the time. If that really means no second Super Bowl until the market can bear another hotel than so be it. I don't know anyone advocating that this decision should be made solely based on landing another Super Bowl. It should happen whenever it needs to whether that's three years from now or fifteen years from now.

                  3) No, they really don't matter very much. As I pointed out before, the IUPUI hotel is not the type of place Super Bowl guests wanted to be. Anthony points out the same thing today. It was a bad location that couldn't draw the convention business to sustain it due to not being anywhere near the convention center. I agree with your point on the Comfort Suites. It should eventually be fine but it's a mediocre location for now. When Lucas Oil was built there were originally all kinds of plans for other developments near there that fell through. If some of that happens when the economy rebounds they will probably be fine. Right now it just seems like a really bad location to stay other than for people going to Colts games ten or so weekends a year.

                  4) No, the proposed light rail system will not cost millions. It would cost billions. Commuter rail makes tons of sense in large cities with high population density. In medium sized cities with relatively low population density like Indy, a good bus and road system makes far more sense. Even if you spend billions to put in a light rail system from the aiport to downtown and Fishers/Noblesville to downtown it will do little to reduce traffic and road expansion needs. Really, congestion and traffic delays are pretty low in the metro area overall. Proper expansion of roads in a few areas (69 from 465 to Deer Creek exit being the biggest one) will largely take care of problems. I'm not saying light rail might not make more sense at some point in forty or fify years as the metro area population expands but even then you need to start moving to have some higher population density to make it work.

                  5) Actually, it is laughable to have expected more of a return at this point than we have seen. You're pretty naive if you thought that we would see corporations announce a move to here within 90 days or major convention announcements happening immediately. Neither one of those things happens quickly.
                • Truth hurts
                  "Tick Tick Tick," you did not answer any of my questions. If the truth is so bad, Irsay so evil and the Super Bowl so harmful to Indy, why do you need to embellish?
                  • Truth Will Set You Free
                    Dear Minion..I mean Marie,

                    Don't you think you are embellishing my comments?

                    I stand by my comments and the facts contained in them.

                    You are welcome to put out an opposing view with supporting facts for public scrutiny. (If Jim tells you its Ok)
                  • Minion here
                    Ha ha, whatever! Me thinks your facts are not factual.

                    Still haven't answered my questions.

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                  1. How much you wanna bet, that 70% of the jobs created there (after construction) are minimum wage? And Harvey is correct, the vast majority of residents in this project will drive to their jobs, and to think otherwise, is like Harvey says, a pipe dream. Someone working at a restaurant or retail store will not be able to afford living there. What ever happened to people who wanted to build buildings, paying for it themselves? Not a fan of these tax deals.

                  2. Uh, no GeorgeP. The project is supposed to bring on 1,000 jobs and those people along with the people that will be living in the new residential will be driving to their jobs. The walkable stuff is a pipe dream. Besides, walkable is defined as having all daily necessities within 1/2 mile. That's not the case here. Never will be.

                  3. Brad is on to something there. The merger of the Formula E and IndyCar Series would give IndyCar access to International markets and Formula E access the Indianapolis 500, not to mention some other events in the USA. Maybe after 2016 but before the new Dallara is rolled out for 2018. This give IndyCar two more seasons to run the DW12 and Formula E to get charged up, pun intended. Then shock the racing world, pun intended, but making the 101st Indianapolis 500 a stellar, groundbreaking event: The first all-electric Indy 500, and use that platform to promote the future of the sport.

                  4. No, HarveyF, the exact opposite. Greater density and closeness to retail and everyday necessities reduces traffic. When one has to drive miles for necessities, all those cars are on the roads for many miles. When reasonable density is built, low rise in this case, in the middle of a thriving retail area, one has to drive far less, actually reducing the number of cars on the road.

                  5. The Indy Star announced today the appointment of a new Beverage Reporter! So instead of insightful reports on Indy pro sports and Indiana college teams, you now get to read stories about the 432nd new brewery open or some obscure Hoosier winery winning a county fair blue ribbon. Yep, that's the coverage we Star readers crave. Not.

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