Monday, November 26, 2007

From Redev Meeting

Resolution 2007-90

Approving the execution of a Capital Improvement and Access Agreement with the Embassy Theatre Foundation, Inc.
Greg Leatherman started out by explaining the process that the walkway deal has gone through thus far. He also explained why the Indiana Hotel has been hard to renovate, which centered around the changes in building codes over the years that have left the hotel outdated and obsolete. One of the main impediments to development has been accessibility requirements.

Leatherman then went into why the walkway came about and the fact that the developers of the new hotel stated that a walkway was necessary in order to stay competitive with the Hilton that is directly connected to the Grand Wayne Center.

Leatherman explained that a number of options were looked at for directing traffic from the new hotel to the Grand Wayne Center. One of the options considered was to have the walkway go underneath the street but because of groundwater issues the option was deemed impossible. The other option was to build the walkway into the glass side of the Grand Wayne Center, but doing so would be difficult and likely prohibitively expensive.

The last option was to utilize the Indiana Hotel and the Embassy Theater in order to take hotel guests across Jefferson Boulevard. This option made it a necessity to involve the Embassy board and historic preservation specialists to ensure that the walkway would maintain the historic designation of the Indiana Hotel and that it would benefit both the new hotel and the Embassy. Leatherman stated that this option was a "win-win" because it not only provided the walkway to the Grand Wayne Center but also opened up the possibility for future redevelopment of the Indiana Hotel - a goal that has been long wanted but short on opportunities.

Steve Brody, project manager for Harrison Square and walkway negotiator, then discussed the process that was taken during talks between the involved parties. He stated that the objective was not to get it done as quickly as possible, but rather to get it done right so that all parties would be satisfied with the outcome.

Brody made it a point to note that the walkway would be south of the historically noted terra cotta that exists on the corner of the Indiana Hotel and that the pedestrian walkway would actually utilize and open up an already existing window instead of cutting into the building.

Brody then discussed the financial breakdown of the deal, which totals $1.85M. (see included list below)


$1 million would essentially be spent on the construction of the walkway itself and would come from the Harrison Square project budget. The Redevelopment Commission would be responsible for the maintenance of the walkway at a cost of about $6000-$7000 a year. Besides just the walkway, however, was another $850,000 or so that would be used to bring the Indiana Hotel towards a usable condition. The breakdown for these funds is split between a $550,000 donation from the Goldstine Foundation and a $300,000 contribution from the City of Fort Wayne to the Embassy Foundation.

Included in these funds is a lift for handicap accessibility, reconfiguration of the Embassy's third floor storage space, construction of an elevator shaft and stairway on the east side of the Indiana Hotel, installation of an elevator in an existing shaft on the west side of the Indiana Hotel, and reconfiguration of the parking lot immediately south of the Indiana Hotel (see figure below).


The reconfiguration of the parking lot was said to cost $48,000, which would be split between the Parks Department and the Redevelopment Commission. The funding would likely come from a previously passed $10M CEDIT bond.

The funding of the City's $300,000 contribution would likely come from the interest accrued from the proceeds of the taxable Harrison Square bond or from a portion of the proceeds received from the sale of land to be used for the retail and condo developments within Harrison Square.

A $152,000 construction contingency was also included in the figures for the walkway project. If not needed, the cost of the walkway would essentially be $152,000 less than projected.

In terms of schedule, the aim is to have all construction, changes, and improvements be completed at the same time and be ready by the time the new hotel opens.

Kelly Updike, executive director of the Embassy, stated that the Embassy was excited about the project and to be a part of Harrison Square. She stated that the goal of the Embassy in terms of the walkway project was to keep the Embassy and Indiana Hotel current while at the same time preserving the historic characteristics inherent in both.

The Resolution passed unanimously.

Related post from Jeff Pruitt at Fort Wayne Left:
Harrison Square Walkway - $1.85 Million

11 comments:

John B. Kalb said...

Scott S. - What will be the source fund of the $300,000 from City of Fort Wayne? John B. Kalb

scott spaulding said...

Financing wasn't finalized but possibilities were using the interest from the taxable Harrison Square bonds or the proceeds of the sale of land to be used for the retail/condo development.

John B. Kalb said...

Scott S. - So, with the exception of the Goldstein Foundation contribution, all extra financing will be from taxes(or interest on money borrowed and being repaid with tax funds). Can we assume that the Goldstein Foundation money can be looked at as a "return of commissions earned" on HS property dealings? It's interesting that the $550,000 is very close to the commissions earned. If so, this is not really private investment, is it? John B. Kalb

Scott B. said...

If the owners of the hotel were concerned about being competetive with the Hilton, why didn't they put up the money to build the walkway?

I also want to know what the usage is of the walkway between the Hilton and the Embassy.

I am relieved to hear that the owners of the Marriott asked for the walkway to stay competative. So at least it wasn't an offer by the city. But again, refer to question one.

brian spaulding said...

John,

What does the Goldstein Foundation have to do with "return on commissions earned" on HS? It sounds like they are simply long time Embassy supporters.

A foundation donates a half million dollars and it must be a conspiracy, right?

No news is good news?

John B. Kalb said...

Brian - This type of foundation is one of the tax-avoidance methods of financial planning - It will be interesting to see how much the Goldstein family puts into the foundation this fiscal year. John B. Kalb

Jeff Pruitt said...

John,

Regardless of how much Goldstein Real Estate makes this year they didn't HAVE to donate the $550k. I'm sure you know that a charitable donation only decreases ones tax liability but cannot eliminate it. In other words they would've been much better off by just paying taxes on the profit and not donating it. Let's just be happy that this is $550k less that the city has to waste for this ridiculous walkway that nobody wants.

Scott b,
It's easier for the hotel developers to milk the city for everything we have than to put up their own capital. We've given them the land (sorry we charged them $17.50), built them a parking garage and guaranteed their profit margin for 10 years - why not push for the $1.85 Million "deal breaker" while they're ahead?

I hope HS is successful but that worthless Courtyard goes bankrupt - nevermind that's not possible...

brian spaulding said...

I applaud the Goldsteins for their generous contribution to downtown, family or foundation.

Areas such as downtown Chattanooga have grown tremendously due, in large part, to similar foundation contributions. I hope more local groups follow in this foundation's footsteps.

Wendy said...

Ok, first of all, it's Goldstine. Secondly, Bob Goldstine, whose estate created the foundation, has been dead for several years. Third, Bill Martin of Martin Realty bought one of his competitors, Goldstine Inc., a few years ago, which is when it became Martin Goldstine Knapke. I don't think there's any connection between the two other than the word "Goldstine". If I recall correctly, the Goldstine Foundation has a long history of supporting the Embassy - this is a natural fit.

John B. Kalb said...

Wendy - Thanks for the facts in your comment. I was not aware of these.
Scott S. - Can you find out what city code allows the City of Fort Wayne to contribute $300,000 of public money to a private non-profit foundation like the Embassy Foundation? John B. Kalb

barranda said...

Wendy,

I'm sick of you trying to interject facts into these speculative debates.