EVANSVILLE —Development of a Downtown convention hotel headed back to the drawing board Wednesday morning as the Evansville Redevelopment Commission authorized a new feasibility study and analysis of the project.
The commission by a 3-to-2 vote approved spending roughly $40,000 to hire a Chicago firm to determine what size hotel should be built, what level of service it should provide and what should be the amount of city investment in the project.
The proposed hotel, to be built at Walnut Street and Martin Luther King Boulevard, would serve the nearby Ford Center and The Centre convention center.
The study, sought by Mayor Lloyd Winnecke, was awarded to Hunden Strategic Partners, which last year conducted a $30,000 analysis that said a $33 million, 220-room hotel proposed by the Kunkel Group was financially viable.
City Council appointees to the Redevelopment Commission, Stan Wheeler and Jay Carter, voted against conducting another study, while Winnecke appointees Ed Hafer Jr., Randall K. Alsman and Sara L. Miller supported it.
Second Ward Councilwoman Missy Mosby urged the commission to forgo the study.
“We’ve done enough studies on this project, and it was already voted through City Council last year,” Mosby said. “It’s time to build a hotel.”
The study is expected to take about two months.
Rob Hunden, president of Hunden Strategic Partners, said the study would encompass 13 tasks that include perspectives such as tourism, the convention industry, regional competition and a meeting planner survey. The study also would provide a cost estimate, investment return and economic impact.
Some examples of variables to the hotel project that were not explored included what plans Casino Aztar has to renovate its aging hotel and the possibility of the revival of Hotel McCurdy, Hunden said.
The progress of Interstate 69 toward Evansville also is an issue.
“And that could be a wonderful resource something like this project could benefit from,” Hunden said. “But the point is, we don’t know.”
In August, Hunden launched a vetting process of two hotel proposals before the Redevelopment Commission and determined the Kunkel Group and its $33 million, 220-room hotel was financially viable.
Kunkel’s plan used $8 million in city incentives, which included a $1 million forgivable trade for the land where the hotel would be built. The incentive also included a $3.5 million forgivable loan, and another $3.5 million that would be repaid at 5 percent interest.
The 220-room amount came from a request for proposals the city made two years ago asking developers to name the appropriate size for the hotel. A response made by Indianapolis-based White Lodging included 220 to 250 rooms, but that deal later fizzled. Kunkel had said the number of rooms in his proposal was vetted by the brand he chose, Sheraton, and the finance company willing to provide more than $20 million in senior debt.
Wednesday morning, Kunkel said he predicted the Redevelopment Commission would ask for another request for proposals, which would delay the project by about a year.
“I’m not sure if I’m willing to wait that long,” Kunkel said, adding he already has his own money waiting to be spent on the project.
The Redevelopment Commission and others in the meeting continuously referred to Kunkel’s deal including $10 million in incentives. Hafer said that amount also included a 10-year tax abatement also included in the deal.
Evansville Convention & Visitors Bureau Director Bob Warren said a brief study he conducted determined the community is losing $12 million annually in lost revenue from conventions. The city has not held a notable convention since 2009, Warren said.
“But that doesn’t mean we should just rush in to things,” Warren said. “I think this study is a great idea.”