A couple of Indiana hotel developers who say they are willing to consider trying to build a replacement for the Executive Inn in Downtown Evansville agree that no one will be able to complete such a project without some form of local government assistance.
Tim Dora, president of Dora Brothers Hospitality Corp. of Fishers, said he is waiting to see what Evansville officials want in a new hotel Downtown before deciding if his company should try to win the job.
But one thing is certain in his mind: Neither Dora Brothers nor any other developer will be able to finance the project without help from the public coffers.
"It's going to take an enormous contribution from the local community to get that done," Dora said. "This is the worst environment for commercial real-estate development I've seen in my lifetime, and I'm 50 years old."
For their part, local officials aren't saying how much public assistance, if any, they think should go to a replacement of the Executive Inn. The city might provide the site for a new hotel, but officials have remained silent on what incentives they are willing to offer in return for the completion of the project.
Mayor Jonathan Weinzapfel has said what the city will put on the table will depend largely on what developers say they need when they respond to a request for proposals local officials plan to send out in coming weeks.
Members of the Evansville Redevelopment Commission are to decide Wednesday if they want developers to consider renovating the remnant of the former Executive Inn, or if they want to abandon that option in favor of construction of a new hotel.
Weinzapfel and others say there is little doubt that something must be done there. The former Executive Inn has stood in a half-demolished state since a wrecking ball knocked down the back part of it to make room for the Downtown arena in December.
Every month that goes by without a hotel next to The Centre increases the chances that Evansville will lose more convention business to other cities. Local officials meanwhile recoil at the thought of seeing the Downtown arena open on schedule in fall 2011 with a half-demolished building as the backdrop.
Knowing of those concerns, the question for Dora and other developers is: To what length is the city willing to go to change the situation? Dora said he thinks any company that wants to build a hotel in Downtown Evansville will run into the same hurdles encountered by Browning Investments of Indianapolis, which couldn't get the loan needed to complete the project to the city's standards.
Dora Brothers had to seek public assistance to finance the construction of a Holiday Inn Express near the intersection of Interstate 70 and U.S. 41 in Terre Haute. For that project, which will cost far less than replacing the Executive Inn, the local government issued special bonds that resulted in lower payments of net interest and granted a tax abatement that will lower the amount of taxes owed on the property for a set number of years.
Dora also got assistance from a tax increment financing district when building a Hilton Garden Inn in downtown Terre Haute. The TIF district, which collects taxes paid on properties within a certain area and sets the money aside for projects within the same area, helped pay for demolitions, additional parking spaces and utility installations.
In Columbus, where plans for a downtown renovation also are moving forward, Dora Brothers received a tax abatement, as well as a donation of land and cash from a private foundation, in return for a project it was undertaking. Tim Dora said it helped throughout it all to have lenders who shared the goals with the cities in which his company worked.
In the case of the Holiday Inn Express, he turned to First Financial Bank of Terre Haute.
"They are very much a community bank and very much community-minded," Dora said. "They went way overboard in their efforts to see this project get done."
In Evansville, at least two companies have expressed interest in building a new hotel or, in the case of one, a renovation. And both say the projects will be impossible without assistance from local government.
David Dunn, president and chief operating officer of Dunn Hospitality of Evansville, said Dunn Hospitality likely will respond to the city's request for proposals on ways to replace the Executive Inn. And like Dora, he doubts Dunn Hospitality will be able to seriously consider undertaking the project without some government assistance.
Dunn is, perhaps, in as good of a position as anyone to understand the predicament posed by the loss of the Executive Inn, since he spends some of his time away from work serving as a member of the Evansville Convention & Visitors Bureau.
Dunn said he is well aware of the ability a large hotel has to make The Centre attractive to convention organizers. But he won't let such thoughts trump business considerations.
"I think our interest is piqued and is increased by the fact that it is in our own backyard," Dunn said. "But at the end of the day, it's still a pure business decision."
Another local company that says it's likely to respond to the city's request is The Kunkel Group.
Chuck Harper, a vice president with Kunkel Group Realty, said he, too, believes either a renovation or new construction won't get off the ground without a push from local government.
"I think financing is going to be a hurdle for everybody," he said. "And it's my opinion that the city is going to have to do something to make financing possible."
Before local officials decide what incentives they want to offer, they must answer the question of whether it will be best to pursue a renovation or go after a new hotel. Weinzapfel and John Kish, director of the arena project, have made their preference known.
Both have said Browning Investment's experience with trying to renovate the Executive Inn remnant show that the building's structure is not strong enough to support the sorts of changes that will be needed to bring the property up to a three-star standard. They therefore see no point in asking for anything but a new hotel.
Members of the Redevelopment Commission will have the final say at their meeting Wednesday.
Bob Goldman, president of the commission, said he is reluctant to seek renovation proposals.
If the city tries to save the remaining part of the former Executive Inn, he said, it may make good developers reluctant to submit ideas for new construction. Why, Goldman said, spend the time and money needed to assemble a proposal only to be outbid by a cheap renovation plan?
"If we eliminate the renovation, we will be better off," he said. "And if we don't like what we get, we can always send out a new (request for proposal) for the renovation."