EVANSVILLE - Construction on the medical campus pegged for Downtown Evansville is projected to start by fall, a few weeks after work on the convention hotel begins, the Redevelopment Commission was told Tuesday.
The two projects, along with a 552-space parking garage and streetscape improvements, have a combined $77 million in bonded public subsidy. The Redevelopment Commission at a July meeting hired Nick Jahn of VS Engineering to coordinate all utility relocation, traffic and similar tasks.
The Winnecke administration has said hotel construction is expected in August or September. On Tuesday, the Redevelopment Commission signed off on the hotel’s redesign in a 4-0 vote. State approval of the redesign and a new franchise agreement with Hilton DoubleTree are pending, followed by the close of financing.
The downsized Downtown convention hotel project has “preserved the city’s expectations while addressing the cost of construction,” according to a summary by HCW Evansville Development Inc.
To cut costs by at least $10 million, the hotel was reduced from 10 floors to five floors, and its residential component was removed.
“HCW was able to maintain the room count of 240 as required by the Convention & Visitors Bureau and city criteria, as well as provide the restaurant, exercise facility, pool and other amenities, and maintain the integrity of the convention center as depicted in previous plans,” according to the developer’s summary provided to Redevelopment Commission members.
The Redevelopment Commission on Tuesday also took action related to the medical campus and parking garage, voting 4-0 to authorize a lease financing agreement calling for the nonprofit Evansville Brownfields Corp. to be the issuer of bonds on those projects. The medical campus developer is U.S. HealthRealty/Skanska.
City Attorney Nick Cirignano said the agreement is complicated and similar to that of the Ford Center, except on that project, the Evansville Redevelopment Authority was issuer of bonds.
“The Redevelopment Commission technically leases the Ford Center from the ERA and then makes lease payments to the ERA, which equal the amount of the bond payments the ERA then has to pay to the bondholders,” Cirignano said. “That’s what’s going on here (with the medical school).”
Redevelopment Commission member Cheryl Musgrave asked why the Brownfields Corp. was being used as the bond issuer on the medical school and parking garage projects rather than the Redevelopment Authority.
Cirignano answered that in the case of the medical school, the city is making a subsidy to a private developer, “and accordingly, due to various other provisions in (state) code, we are required to take the second route through a nonprofit rather than through the Redevelopment Authority.”
Redevelopment Commission Mike Schopmeyer said the newly opened Deaconess Sports Park is set up on a similar arrangement. Schopmeyer is on the Convention & Visitors Bureau board, financier of the sports park.
Lease financing agreements on the medical school and parking garage still remain subject to a still-unscheduled public hearing by the Redevelopment Commission.
“My last discussion with the medical school developer (indicated) they want to be out there doing work, actual work, by the end of September, beginning of October,” Cirignano said. “You can imagine that the medical school development would not be interested in doing too much work until they know the city has its money in place that it has pledged for construction of the medical school. So that is why we are trying to stay on this timeline to get the funds to the city by mid-October, so the medical school developer can move forward with a certain amount of certainty on this project, and meet the timeline required by Indiana University.”
City officials said a groundbreaking on the medical campus project will be conducted but will be planned by IU. The University of Southern Indiana and the University of Evansville also will offer programs at the site.
Partners in the campus say they will continue to push state legislators in the future for inclusion of Ivy Tech Community College Southwest.
“The projects will be going on at the same time,” Department of Metropolitan Development Director Kelley Coures said of the hotel, medical campus and related construction. “It’s going to be a real busy area.”