One group submits proposal for downtown hotel
http://www.fortwayne.com/mld/journalgazette/16697717.htm
From the article:
"Getting a new hotel developer was a critical component for the city’s proposed Harrison Square development. The hotel is projected to generate hundreds of thousands in taxes that will be one of the main funding sources for the rest of the project."
"Property taxes paid by the hotel development would be captured in special funds that will help finance the rest of the public share of the downtown development."
"The city plans to donate the land to the project, as well as provide $10 million in financing. Of that $10 million, half will be used for a $15 million parking garage, as one-third of the garage will be dedicated to hotel patrons."
"City officials hope to have all agreements in place to move forward with the Harrison Square project – including the selection of a hotel developer – by the end of March."
City gets one response for downtown hotel
http://www.fortwayne.com/mld/newssentinel/16697605.htm
From the article:
"The City of Fort Wayne received one response to its request for proposals for a new hotel in downtown Fort Wayne. The proposal calls for a full-service Marriott-branded hotel.
The City of Fort Wayne received one response to its request for proposals for a new hotel in downtown Fort Wayne. The proposal calls for a full-service Marriott-branded hotel.
White Lodging Services Corporation of Merrillville, along with Acquest Realty Advisors, Inc. of Bloomfield Hills, Mich., has submitted a proposal to the Chicago offices of C.H. Johnson Consulting, Inc., which serves as a consultant to the City of Fort Wayne.
The proposal will be reviewed by C.H. Johnson and will then be subject to review by the Fort Wayne Redevelopment Commission."
Wednesday, February 14, 2007
Meet Me At The Marriott
Posted by scott spaulding at 2/14/2007 01:06:00 PM
Labels: Downtown development, Financing, Harrison Square, New hotel
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4 comments:
I will be getting the financial information concerning the City Parking Garage over the next couple of months from Fort Wayne.
It is going to be WORSE then I thought at first.
The new Parking garage is about the same size as the existing parking garage next to the City-County Building.
The existing County Parking garage lost ABOUT $250,000 per year from 2002 - 2005.
Everything below is a GUESS. I will work an actual estimate up later...
I am revising my estimate of the annual loss the City will sustain on the parking Garage UP.
Consider this:
1. The new Parking Garage will be in an inferior location to the new Parking garage. This would certainly lead any independent person to realize that the new parking garage will lose more money based on lower revenue due to location.
2. The new Parking Garage will be allowing Lincoln Employees to use HALF of the Parking Garage for free during the week. This will lower revenue if it is true. In fact, this could lower revenue by a lot.
3. Per today's newspaper the HOTEL we are subsidizing will get one third of the Parking spaces in the garage. I wonder how this will work. I have NEVER paid for parking at ANY hotel I have ever stayed at. Parking is generally provided by the hotel. I will look into this more down the road. This could lower Parking Garage revenue as well...
4. The existing Parking garage utilizes County Employees. The new one will employ City employees. City employees make more money; therefore, expenses in the new garage will increase.
5. The County rents the existing Parking garage from another Party. In 2005 the "rent" payment was $300,000 per year. The City now wants to borrow money and build another Parking Garage. This means the City will be making principle payments on a 15 million dollar loan, interest payments on a 15 million dollar loan, and fees to bonding attorneys to set this loan up. This will be very expensive. The City should consider this payment to be an expense of the Parking garage!
If the bonds are 25 year bonds then we will have to pay about 1.2 million dollars per year for the life of the bonds...
So realizing that 1/3 of the parking garage will be reserved for hotel patrons and that 1/2 of the parking garage will be reserved for Lincoln employees during the work week I think we would be lucky to collect $300,000 in parking receipts. (Note the County parking garage brings in about half a million in receipts...)
The other expenses of the parking garage should be similar to the County parking garage, ignoring rent this is about $300,000. This ASSUMES that the City will be able to operate the garage with a similar staff and expenses as the County Parking garage...
Rent would be about 1.2 million per year.
This would result in an operational loss of 1.2 million per year for the life of the bonds...
Ouch...
Where will that money come from?
Mike Sylvester
I can't see why anyone would build a parking structure just so certain privileged groups can utilize it for free.
I can only think of 2 scenarios (that involve other parties).
In scenario 1 the construction of the structure is funded primarily by private parties for their portion. If the parties can't afford to keep all their spaces then they can be opened up to the public to supplement maintenance costs. These parties wouldn't participate unless the demand was there.
In scenario 2 there is a guaranteed inflow of revenue from the private parties who reserved those spots. Simply put you haven't paid for parking at hotels because the hotels pay it for you.
Right? Am I missing something?
I see either scenario as a being better solution then a public garage. There is guaranteed revenue even if all the spots are not filled. You also mentioned the Lincoln spots are only reserved during the week days, probably during business hours. After that its open for anyone... when people want to actually use it.
What is the purpose to post guesses or assumptions anyway but to stir people up? Please come back with comprehensive factual data.
I truly think the reason for a public garage is the fact that no private entity is willing to accept the annual losses (as Mike suggests).
I would bet that even if the city built the garage and tried to GIVE IT AWAY for someone else to take over they would be unsuccessful because the annual operating costs would discourage any private investor.
Basically the city will be provided an annual subsidy for this project for the infinite future - and a hefty one at that...
You know one thing that really impresses me about Fort Wayne bloggers is that'can do' attitude. I can feel the positive attitude oozing from their posts. I suggest we never do anything and downtown and let it rot and decay. Then in a few years we can move all of the offices to the Conventry Plaza in Aboite because it is newer and needs new tenants. Of course what do I know I just hate anything new and certainly am going to complain about any change anywhere in the city because I feel it is my God given right
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