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So, why would Carmel not do a fixed fee construction contract?
Brainard said governments can’t do that until after funding is approved. However, that doesn’t negate why it took until late on a Friday in February 2020 for some government agent to tell us costs had ballooned significantly.
Who is responsible and who is going to hold them accountable?! Governments and municipalities should never get into business like this. If private investors didn’t believe a high end luxury hotel would work, then why did Carmel take it upon themselves to build a high end luxury hotel? Does Carmel think their expertise is better than the top luxury brands?
At these inflated cost overruns, this increases the overall proforma and I can’t even imagine what it does to the overall working capital needs for the day to day operations to reach stabilization. Where is that money coming from? Is that part of the inflated budget?!
By the way, didn’t this same thing happen with the Monon Center? Has the Monon Center ever made a profit?
Soft costs of 28% are very high – anyone want to ask what the developer fee built into this is?
Foolish, ill-conceived project that has been poorly managed. Classic example of why government should stay out of the development business. There is no way they can generate sufficient revenue to pay for this boondoggle. This hotel will be a looser and an embarrassment for Carmel for years to come.