The Indianapolis City-County Council on Monday night voted unanimously to issue up to $155 million in bonds to pay for an expansion of the Indiana Convention Center.
Kite Realty Group Trust plans to construct a publicly-funded, 300,000-square-foot addition to the convention center, plus two privately-funded hotels with 1,400 rooms on the site of Pan Am Plaza.
Kite acquired the 1,200-space parking garage beneath Pan Am Plaza for $30 million in March 2019 and plans to fully rebuild the structure while razing the remainder of the plaza for the convention and hotel project.
City leaders say in order to remain competitive with other convention cities, the city needs to expand its meeting space.
And while the proposal has gained bipartisan support from the City-County Council, some experts and hoteliers wonder if moving ahead with plans for more hotels is wise with so much economic uncertainty spurred by the ongoing pandemic.
To finance the convention center expansion, the city plans to issue up to $155 million in bonds that would be paid back through tax-increment financing over 25 years. TIF districts capture growth in assessed value, which generates increased property tax revenue to cover the cost of new public infrastructure.
The city expects debt service on the project to run about $10 million each year. It will use increased property tax revenue from the first hotel, estimated to be about $4 million to $5 million annually, coupled with funding from the existing downtown TIF district, to pay off the bonds.
Annually, the city provides the Capital Improvement Board with about $8 million from the downtown TIF district for operations. A portion of that funding—about $5 million to $6 million—would be redirected to bond payments.
The bonds would be used to pay only for the publicly-owned assets of the convention center expansion, including the 50,000-square-foot ballroom, the covered walkway connecting the addition to the existing building across Capitol Avenue and infrastructure improvements on Georgia and Illinois streets.
Combined, those aspects of the project are expected to cost $125 million. The other $30 million would go toward capitalized interest, which would cover early bond payments and financing costs associated with issuing the bonds.
Kite Realty is expected to finance construction of the hotels with no subsidies from the city.
Council Minority Leader Brian Mowery, a Republican, said the project ensures Indianapolis will continue to be a top convention city for years to come by enabling it to host larger conventions the city can’t accommodate right now and by keeping conventions that continue to grow.
“This is such a crucial proposal and a crucial development for our city,” he said while bringing up the former Hoosier Dome, which the city started building in 1982, nearly two years before luring the Colts away from Baltimore. “You look back years past when they said we were going to build a dome for a football team. They didn’t know we had a team, but look at us now.”
“This is our next level opportunity to get and continue to attract more and more convention business,” he added.
Councilors also lauded the commitment by Hilton, which will run the hotel, to pay its employees at least $14 an hour, saying that pledge would increase hotel wages across the city.
Councilor Jared Evans, a Democrat, called the vote Monday night a “shining moment” in the city’s history, saying that, as other cities have halted conventions, Indianapolis is doubling down on them.
Mayor Joe Hogsett, a Democrat, thanked the council for its bipartisan approval.
“Tonight’s passage of the Indiana Convention Center expansion marks a major milestone for the future of our downtown,” he said. “Through an innovative partnership between the Capital Improvement Board and Kite Realty Group, this sixth convention center expansion will create thousands of construction and hospitality jobs, while positioning Indianapolis for growth as we emerge from a global pandemic.”
10 thoughts on “City-County Council approves financing plan for convention center expansion”
Great investment for the future! Good job Indy!
While the downtown burns because of our cowardly mayor. Maybe by then we’ll have someone who has a backbone to keep the new, shiny hotel windows from getting bashed in.
Very bored with you continued blame game, think we are all(excluding you} ready to move on.
Downtown is burning… some new CDs of gaudy music to play on Monument Circle!
But for real though, James, your comment is unhinged.
Please stop bringing up the 40 year old decision by Hudnut to build the Hoosier Dome w/o a football team. Due to the dramatic change in the landscape of both professional sports that would be a foolhardy gamble today. And downtown’s renaissance, while coincident with the Colts recent success, is not dependent upon the Colts and their 8 dates a year. For example, the Colts arrived in 1984 and there were still empty holes downtown 11 years later until Circle Centre was completed.
Why have anything downtown Our highways are full of trash and debris. You cannot even use the Emerngcy lanes. I went to Detroit yesterday and the the highways were so clean through the city every Direction.
Our Mayer is trying to destroy Indpls.
The mayor has no control over interstate highways. Talk to the Governor and the supermajority Republican GA.
I do Trade Shows and Conventions all over the US. Indy is not on the list for most major shows. Vegas is still #1 with Orlando a close #2, with San Antonio and San Diego in the top 5. Until there is a major Hotel at the Airport – not 2 miles away, Indy is considered a second tier city for professional events.
Riots Downtown did not help convince Trade Organizations that Indianapolis is an attractive destination. Safety from Crime is a much bigger factor than the Virus.
Is there anyone on the council who will stand up for taxpayers? The convention business has been losing popularity for the last decade. Yet every few years we expand the convention center and soak taxpayers. Now we are in the midst of the worst pandemic in a 100 years and we do not know when, or if, we’ll get back to large downtown events. So this time, they are mortgaging the future to do yet another expansion. A 30 year bond? Are you kidding me? We need politicians who will stop this corporate welfare nonsense.
Yes, it’s an arms race that can’t be won. Indy needs to refocus on events that fit within the existing infrastructure and invest in the amenities that visitors and convention goers command – safety, security, technology, etc.