The city of Indianapolis has agreed to kick in as much as $48.5 million toward the construction of a new 1,000-room convention hotel near White River State Park.
In a letter of intent, the Indianapolis Bond Bank agreed to an investment package that could include a 10-year tax abatement and a new tax increment financing district set up to pay off publicly issued bonds. Together, the incentives would not exceed $48.5 million.
“Right now, we are trying to be nimble and flexible,” said Barbara Lawrence, the bond bank’s director. “We wanted to allow for flexibility in terms of how the overall investment is structured.”
The developer, a partnership of Merrillville-based White Lodging Services Corp. and Indianapolis-based REI Real Estate Services, would have to start construction on the project by Jan. 31, 2008 and open by January 2010.
The agreement also requires the developer to build 1,000 rooms, up from an original proposal of 800, and redesign the project to meet the city's approval.
The plan calls for a $250 million campus of hotels including a flagship JW Marriott on land that's now home to a 235-room Courtyard by Marriott and a TGI Friday's across from Victory Field.
The developer must make a minimum equity contribution of $50 million, according to the letter, which the bond bank released this morning.
The agreement also requires the developer to establish and make a contribution to a fund supporting the Indiana Sports Corp. and Indianapolis Cultural Development Initiative.
The city says the public dollars are an investment that eventually will pay for itself by attracting more visitors.
The parties hope to have a final project agreement in place by April 1.
The new hotel would be the city’s largest. The 615-room Indianapolis Marriott Downtown, which is now the biggest, received an incentive package from the city worth $33 million, including bonds, free land and a tax abatement.
The city late last year chose the White-REI proposal over one submitted by a partnership of locally based Browning Investments and a Milwaukee firm. The Browning team wanted to build a 44-story InterContinental Hotel on Pan Am Plaza.