OFFICIAL - Loews Convention Hotel (formerly Hyatt)

Issues concerning Downtown as described by the Downtown Council. River to 31st Street, I-35 to Bruce R. Watkins.
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DaveKCMO
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Re: New Convention Hotel

Post by DaveKCMO »

http://www.bizjournals.com/kansascity/b ... delay.html
http://www.kansascity.com/news/governme ... 49803.html
Steven Rattner, a New York finance expert who has worked on the $311 million, 800-room Hyatt hotel deal for more than two years, said developers were ready to go to Wall Street to finalize the hotel bond financing — until a Kansas City petition initiative drive recently halted that effort.

If the developers have to wait six to eight months or longer for a public vote on those petitions, Rattner told the council, construction costs and interest rates could rise or other factors could unravel the financing.
the same issue delayed streetcar -- bonds were not sold until the legal issue was settled.
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Re: New Convention Hotel

Post by DaveKCMO »

ICYMI - http://www.bizjournals.com/kansascity/n ... ntion.html
Barring a lawsuit and court ruling to the contrary, there will be no public vote on city financing for the proposed $308 million Hyatt convention headquarters hotel.

The Kansas City Council voted 12-1 on Thursday to oppose a citizen group’s efforts to delay and perhaps block the 800-room hotel’s construction via initiative petition.
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Re: New Convention Hotel

Post by flyingember »

This was the right choice. I agree with having a public vote for very large projects in principle, but they waited too long. The past decade gave plenty of opportunities to get this requirement into city code.
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Re: New Convention Hotel

Post by earthling »

I'll admit that even though mostly pro-development, I'm still leery about the project given that the convention industry is not exactly growing (if still shrinking) and technically downtown KC already has a 1000+ room hotel. Also, with Marriott buying Sheraton/Westin parent, for better or worse it allows them to coordinate conventions across many hotels with single point of contact for convention planners. And, there are a lot of smaller hotels in the works, including another Marriott. Downtown definitely needs more hotel rooms but it's getting to the point that more hotels are happening w/out much city help.

I'd be more comfortable with the project if it included a large residential element to it to help support hotel operations. KC is behind in the big city trend of large hotel/residential combos where the residents use the hotel services (it helps with hotel expenses during lower occupancy periods) - although Alameda condo building on Plaza uses InterContinental Hotel services. Downtown could use one of those and it would help reduce risk of this project. Does San Fran tower in CC get Westin services?

Even so, I don't think it needs to go to vote. The risk for the City doesn't appear particularly too much.
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Re: New Convention Hotel

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Last edited by pash on Mon Feb 13, 2017 10:45 pm, edited 1 time in total.
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Re: New Convention Hotel

Post by flyingember »

Is really a check or is the city portion more "if you build we won't require you to pay more in taxes and you can have the land, but in turn you hold all the operational and loan risk" ??
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Re: New Convention Hotel

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Last edited by pash on Mon Feb 13, 2017 10:46 pm, edited 1 time in total.
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Re: New Convention Hotel

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pash wrote:It's really a check. In addition to the tax abatements, the land donation, and the guaranteed catering contract (which does expose the city to unfunded future liabilities), the city is giving the developers $35 million in cash.
...from the Tourism Development Fund which is funded through convention/hotel taxes and must be used for....

Sec. 2-932. - Project selection guidelines.
In accordance with the general purpose of the fund to promote neighborhoods, through cultural, social, ethnic, historic, educational and recreational activities in conjunction with promoting such city as an international trade, convention, visitors and tourist center, the following guidelines for project selection are established:

(1)
Projects must take place within city limits and should have appeal to local residents as well as to tourists.
(2)
Projects should be open to the general public and attract persons who would not otherwise plan to be in Kansas City, as well as interest those who are visiting for other purposes.
(3)
Projects should not reflect or enhance political parties, candidates or political office holders.
(4)
Projects should not be normal ongoing activities of individual block clubs and home associations.
(5)
Capital projects may be considered if such projects are consistent with all other guidelines herein and funding for the planning, maintenance, and staffing of the capital projects from sources other than the fund are outlined in the applications.
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Re: New Convention Hotel

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"and the guaranteed catering contract (which does expose the city to unfunded future liabilities)"

It "may" also deny some or all future revenues the city would receive from a caterer. When there is a catered event at the Center the city receives a percentage of the catering revenues. Not sure if the hotel would still pay this percentage as any other caterer would or if the hotel pays a lower percentage or none at all.
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Re: New Convention Hotel

Post by pash »

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Last edited by pash on Mon Feb 13, 2017 11:59 pm, edited 1 time in total.
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Re: New Convention Hotel

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pash, I am not sure what numbers you looked at within the city's budget so I am not sure where your $5MM number comes from. From page 372 of the City's Budget Book for this current fiscal year there is a $1.3MM deficit for the Convention and Tourism Fund.
Now, this Fund is a catch-all Fund for the city's convention and tourism related businesses. It's been years since I have worked with this fund and the city has a new way of budget reporting so I am not sure how all of the numbers play out but here is a brief in-and-out of the Fund.
The main sources of revenue for the Fund are the Convention and Tourism Taxes (hotel/motel taxes and the restaurant tax) and revenues from the operation of the Convention Center. For this year estimated revenues are $50,500,000 but there is a C&T Redirection (something I have no idea of) $4.700,000 so that leaves $46,000,000 after accounting for a few small items and rounding.
Outlays from the fund include transfers to the 12th and Wyandotte STIF and the Neighborhood & Tourism Development Fund (we use to call this the Council's Slush Fund), and a $19,000,000 amount for I would assume the debt service for the Sprint Center and the city's Truman Sports Complex subsidy. These transfers total $20,800,000. Convention Center operations total $26,600,000.
Without rounding you will see the projected deficit of $1,316,827.
One item I am not sure of is how Kemper Arena and the American Royal Complex is accounted for in the city's budget. I am 99.9% sure that those numbers are included in the above but I just can't be 100% sure.
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Re: New Convention Hotel

Post by brewcrew1000 »

smh wrote:
DaveKCMO wrote:side note: olathe is building a 22,000 sq. ft. conference center and 200-room embassy suites at K-10 and ridge view.
I really hope this doesn't affect conferences at the Holiday Inn at I-35 and 87th. I don't always go to conferences in Kansas, but when I do I prefer to not go past 87th.
Just drove past this hotel, can't believe something like this is being built out in the middle of no mans land. I can't believe the entire K 7 Corridor, i had no clue there was so much going on around out there. This Embassy Suites looks almost like the Embassy Suite/Convention Center in NW Arkansas.
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Re: New Convention Hotel

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So, with the petitioners demanding that their initiative be placed on the ballot and with a lawsuit most likely happening, does this stop the hotel development? I only ask this because the same issue prevented bonds from being sold for the streetcar until the lawsuit was fully resolved. If that occurs I feel that the petitioners could get their wish and not have the hotel built at all with interest rates slated to raise by the end of the year (barring any unforeseen issues with the economy).


http://www.kansascity.com/news/governme ... 42381.html
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Re: New Convention Hotel

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brewcrew1000 wrote:Just drove past this hotel, can't believe something like this is being built out in the middle of no mans land. I can't believe the entire K 7 Corridor, i had no clue there was so much going on around out there. This Embassy Suites looks almost like the Embassy Suite/Convention Center in NW Arkansas.
Are you sure you're in the correct thread? This is for the proposed hotel downtown.
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Re: New Convention Hotel

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Pork Chop wrote:So, with the petitioners demanding that their initiative be placed on the ballot and with a lawsuit most likely happening, does this stop the hotel development? I only ask this because the same issue prevented bonds from being sold for the streetcar until the lawsuit was fully resolved. If that occurs I feel that the petitioners could get their wish and not have the hotel built at all with interest rates slated to raise by the end of the year (barring any unforeseen issues with the economy).


http://www.kansascity.com/news/governme ... 42381.html
it will likely stop any financing, so yes. this also happened with streetcar -- outstanding lawsuit prevented city from issuing bonds, thus delaying the project.
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Re: New Convention Hotel

Post by aknowledgeableperson »

flyingember wrote:This was the right choice. I agree with having a public vote for very large projects in principle, but they waited too long. The past decade gave plenty of opportunities to get this requirement into city code.
I decided to bring this back up since this latest development.
You either agree with having a public vote, in principle, or you don't. The matter of timing shouldn't matter since up until the bonds are actually issued anything can happen to throw a monkey wrench to sidetrack the project.
In the past projects like this were brought up to a vote since public debt was involved which more often than not involved some sort of tax levy. So the public did have a say in matters like this, yes or no. Pledging future revenues is a different story in that the public does not have a say in the actions a council take in something that may (and then again may not) turn out to be something that is a drag on city finances.
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Re: New Convention Hotel

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Pork Chop wrote:So, with the petitioners demanding that their initiative be placed on the ballot and with a lawsuit most likely happening, does this stop the hotel development? I only ask this because the same issue prevented bonds from being sold for the streetcar until the lawsuit was fully resolved. If that occurs I feel that the petitioners could get their wish and not have the hotel built at all with interest rates slated to raise by the end of the year (barring any unforeseen issues with the economy).


http://www.kansascity.com/news/governme ... 42381.html
I'm thinking this one could be pushed quicker through for a summary judgment....but I honestly have no idea what I'm talking about.
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Re: New Convention Hotel

Post by grovester »

I hope you're right, but the streetcar was further along when their objections came, so I'm not confident.
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Re: New Convention Hotel

Post by flyingember »

KCPowercat wrote:
Pork Chop wrote:So, with the petitioners demanding that their initiative be placed on the ballot and with a lawsuit most likely happening, does this stop the hotel development? I only ask this because the same issue prevented bonds from being sold for the streetcar until the lawsuit was fully resolved. If that occurs I feel that the petitioners could get their wish and not have the hotel built at all with interest rates slated to raise by the end of the year (barring any unforeseen issues with the economy).


http://www.kansascity.com/news/governme ... 42381.html
I'm thinking this one could be pushed quicker through for a summary judgment....but I honestly have no idea what I'm talking about.
Quicker means the whole process could take 15 months, not 24. The final streetcar judgement was mid Dec 2013. The lawsuit was filed end of Jan 2013. So 10.5 months.

Summary judgements require evidence to back them up. So there's a hearing, and to get a hearing requires legal statements by filed and responses get to be files. Otherwise there's nothing to make a judgement against. A court case vs summary judgement is just to speed up the process, that the judge agrees the argument is so good for one side they don't need to hear more.

And then there's the chance to challenge the validity of the judgement. That's the appeals court level. They can review and refuse or agree to hear the case. That's a nice thing with the courts, they don't have to hear a case, there's all sorts of steps for them to say "you're an idiot, no"
With the streetcar they validated the judgement.
the losing side to submit files paperwork saying why the trial judge was wrong and the winning side gets to show was correct based on the new argument being made, If the appeals court agrees with the losing party then it goes back to trial which in theory could loop back to the appeals court, but in practice theres going to be rules to stop this from happening over and over, plus, there's only so many arguments to make to an appeals court before they will agree with the winning party and stop the circle.

However this whole appeals court path ends up the losing side can apply for the state Supreme Court to hear it. Which isn't a given.
If they don't take it obviously it's over. The last ruling thus is the official one.
In rare cases someone could petition to avoid the lower courts from the start, but you would need a really compelling arguement to get this.
Usually Supreme Court cases happen when there's a compelling arguement that multiple judges are contradicting each other unknowingly, that things have changed in the law and they need to set a court ruling the new way is right, or the lower judges may have not ruled based on the state consultation properly, stuff like that with a big long-term picture to it.

The streetcar case was accepted since it helped solidify certain arguments against forming a TDD are not legally valid and the process the city did followed the state constitution on voting. The arguement against was based on voting rights.

I bet a a possible hotel case will argue that some aspect of state voter rights is being violated by the city. So there will be a back and forth arguement over The rights of voters vs the terms of contracts in a municipal sphere, with various precedents backing timeframes to express rights and all that stuff. It's going to be a fight of who can dig up the best case examples to make their argument stick. One side would have to do a really bad job legally to get a summary judgement given the backing both groups have

My guess is it would take some very clear rulings on the subject, all unified that one side or the other clearly has the rights, with few taking the other stance to go quickly. Once you have deep pockets and he said-no he said arguements court cases tend to drag on,
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Re: New Convention Hotel

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This guy knows everything!
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