Developers planning a new downtown hotel are asking the city for a property-tax break on the project that could save them more than $650,000.
A partnership of HRC Hotels LLC and Good Hospitality Services Inc. known as 110 Downtown Indy LLC plans to spend $10.5 million to buy and redevelop part of a historic building at 115 N. Pennsylvania St.
The 106-room extended-stay hotel, a Home2 Suites by Hilton, is scheduled to be built in the Consolidated Building, in a portion known as the Annex, which is at the rear of the vacant, 15-story structure.
The seven-floor annex has about 70,000 square feet. It was built in the 1950s, more than four decades after the original portion of the Consolidated Building. The Annex has been vacant since 1992, and the Consolidated Building has been unoccupied since 2000.
IBJ first reported on the hotel project Sept. 10.
Construction should start the first of next year with completion slated for the first quarter of 2016. Nightly room rates are expected to run between $130 and $140.
When open, the hotel is expected to employ at least 30 full-time workers making an average wage of $15.70 an hour, the developers said in papers filed with the Department of Metropolitan Development.
DMD staff are recommending the Metropolitan Development Commission approve a 5-year tax abatement that will save the developer $651,577. Over those five years, the company will pay an estimated $434,385 in property taxes. After the abatement period, the developer will pay an estimated $217,192 annually in property taxes.
All of those amounts are in addition to the $91,149.92 in current property taxes being paid on the property, the DMD said.
The rest of the Consolidated Building is now being redeveloped by TWG Development LLC and Ambrose Property Group into 98 market-rate apartments, with room for first-floor restaurant or retail space.
"Previous redevelopment concepts for this property have proposed the demolition of the Annex to provide additional parking for the Consolidated Building," DMD staff said. "The proposed hotel project would allow for productive reuse of the Annex to complement the apartment project, preserve the existing real estate taxes generated by the Annex, and grow the tax base as the abatement phases out."
The preliminary abatement request will be heard at the Metropolitan Development Commission meeting Wednesday. If approved, it will go for final approval at the Nov. 5 MDC meeting.