2023 Year in Review: City takes over Signia after Kite fails to secure financing

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Construction began this summer on a Signia hotel at Pan Am Plaza with a target completion date of December 2026. (Rendering courtesy of Kite Realty Group Trust)

The city of Indianapolis is moving ahead with expansion of the Indiana Convention Center on Pan Am Plaza after announcing in May that it was assuming control of the hotel portion of the project.

Indianapolis-based developer Kite Realty Group Trust handed reins to the project over to the city after the firm was unable to secure favorable enough interest rates on the private market to justify financing the hotel.

The total project is expected to cost $751.6 million, including a $250 million convention center expansion and a 40-story, 800-room Signia by Hilton hotel.

Construction began this summer, with a target completion date of December 2026.

The Indianapolis City-County Council in June voted to allow the city to sell municipal bonds for the project, leveraged against revenue generated by the property rather than existing or new tax revenue.

The city sold more than $430 million in bonds for the hotel, at an interest rate of 5.4%. It could take the city up to 44 years to pay off the debt, although any excess revenue generated by the hotel would be applied to paying down the balance.

The all-in cost for the entire Pan Am Plaza development, when accounting for debt service, is expected to surpass $1.6 billion.

Opponents to the approach, including hoteliers, have said the city’s ownership will place the city in direct competition with other downtown hotels.

The Signia, at the southwest corner of Illinois and Georgia streets, will share event space with the Indiana Convention Center, through an agreement between the Capital Improvement Board and Hilton. The convention center expansion includes a 50,000-square-foot grand ballroom, along with a walkway over Capitol Avenue connecting it to the existing facility.

The expansion is the first since 2011, when the JW Marriott was built. City officials have said the development is necessary to ensure Indianapolis stays competitive with other major convention cities. Already, the project has helped secure long-term renewals from several existing convention clients, like Gen Con and National FFA, as well as agreements with new conventions like the American
Dental Association.

Kite remains involved in the project as a development partner but will not have an ownership stake.•

Check out more year-in-review stories from 2023.

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