By Cory Schouten, The IBJ
The flashiest proposal for a new downtown convention hotel would create the city's second-tallest skyscraper, home to an InterContinental hotel featuring 1,000 rooms, luxury condos, restaurants and retail space. The 44-story tower on Pan Am Plaza is one of three convention hotel proposals vying for support from a newly formed committee appointed by Mayor Bart Peterson. "The building would certainly have sex appeal," said Rob S. Hunden, a hospitality consultant with Chicago-based Hunden Strategic Partners, which has helped develop several Indianapolis projects, including the downtown Marriott. The other two proposals could offer stiff competition. One would create a 1,300-room complex of hotels, including a JW Marriott, that would help connect White River State Park with the rest of downtown. The third would more than double the size of the Westin Indianapolis. The seven-person advisory committee, which includes city, state and corporate leaders, is expected to make a recommendation this fall. Millions of dollars in public money could be at stake. The developers will get a chance to present their proposals in the next few weeks, but they are also working behind the scenes to refine plans and address hurdles. In the case of the Pan Am Plaza proposal, developers haven't been able to acquire an underground parking garage they need, though the owner says he won't hinder the project. Mayor Peterson would not say which proposal he prefers, and he said the city doesn't have a range in mind for how much help it will offer. But based on developer expectations and past local projects, the winning developer could get more than $50 million in incentives. The city wants a new hotel or hotel expansion in place by 2010 to correspond with the opening of an expansion of the Indiana Convention Center. The 275,000-squarefoot addition will be built on the site of the RCA Dome and is expected to cost $275 million. The three finalists vying for the city's blessing: A partnership of Indianapolis-based Browning Investments Inc. and Milwaukee-based hotelier Marcus Corp. wants to redraw the city's skyline with their hotel tower on Pan Am Plaza. "Anytime you see a sporting event on television, and there's a skyline shot of Indianapolis, this will be the kind of building that's always in it," said Dennis Dye, Browning's executive vice president. "People will recognize Indianapolis because of it." The InterContinental hotel chain, which also owns the Crowne Plaza and Holiday Inn brands, has more than 130 locations worldwide and recently opened in Beijing, Baltimore and Kansas City. InterContinental would be an "intriguing" addition to the city's lineup, Hunden said, but he wondered whether it could fill 1,000 rooms a night. He said the brand name is not as strong as Marriott or Hilton. The hotel itself would occupy 35 stories and, depending on condo demand, the tower would stretch upward, Dye said. The existing Pan Am Plaza office building would remain. Pan Am Plaza's proximity to the proposed convention center expansion across Capitol Avenue has fueled speculation for years that a new hotel might be coming. The site is ideal for a convention hotel, just a few minutes' walk to the convention center, Conseco Fieldhouse and Lucas Oil Stadium. It would also add to the city's compact, everything-is-close feel, Hunden said. Developer Michael Browning holds an option to buy the plaza from the Indiana Sports Corp., which he received as a condition of a loan he made to the group after it lost millions of dollars on the 2002 World Basketball Championship. The biggest hurdle might be gaining ownership of the three-level parking garage below the plaza. It would have to be removed and rebuilt to support the tower. If the tower proposal prevails, developers might look to the city for help with the garage acquisition. Project spokesman John Miles said the developers are in discussions with the owner. Miles said he doesn't see eminent domain-a route that would slow the project substantially-"in the equation at this point." Armand Lasky, president of garage owner New York-based Northeastern Security Development Corp., said he wants the site developed and is willing to sell at a fair price. "I'm not going to stand in the way," he said. To take over the garage, Lasky said, developers would also have to buy out a lease agreement he has with Nashville, Tenn.-based Central Parking to operate the garage through 2010. Merrillville-based White Lodging Services Corp. and Indianapolis-based REI Real Estate Services are proposing a complex of hotels with more than 1,300 rooms near White River State Park, where a 235-room Courtyard by Marriott now sits. The proposal calls for an 800-room JW Marriott convention hotel, a 253-room Courtyard by Marriott, a 187-room SpringHill Suites and an indoor water park. The existing Courtyard hotel would be converted into a 150-room Fairfield Inn & Suites. The site also could accommodate another hotel, possibly a Renaissance. JW Marriott-Marriott's top label, with 36 worldwide locations-would overlook Victory Field. The hotel would be linked to the convention center via two skywalks. One would extend across West Street to a state-owned parking garage. The other would run from the garage across Maryland Street to the convention center. The complex also would connect to White River State Park, which includes the Indianapolis Zoo, Indiana State Museum, the Eiteljorg Museum of American Indians and Western Art, and the NCAA Hall of Champions. "Now is the time to really finish off that whole area," said Mike Wells, president of REI. New York-based Starwood Hotels & Resorts Worldwide Inc. and Maryland-based Host Marriott Corp. are proposing an expansion of the 573-room Westin Indianapolis that would add 650 to 800 rooms, depending on market factors and construction costs. The new rooms could be built on top of a three-story wing along Maryland Street that houses ballroom space. The proposal was the least detailed of those provided to the city, but Starwood and Host are being given time to put together specific plans and renderings. Host is in the process of acquiring the hotel from Starwood. With such a small area available for expansion, Hunden wonders whether the proposal provides enough meeting and function space to support the new rooms. He said he wasn't sure how much a Westin expansion would "help the city." "The Westin is something that could expand at any point in time," he said. "Is it today? I don't know." Starwood officials would not comment on the proposal, and the hotel's general manager did not return a phone message by IBJ's deadline. The developers proposing new hotels said they expect their projects would cost about $250 million. None would disclose how much city help they are seeking, but REI's Wells said subsidies for similar projects generally run between 30 percent and 40 percent of development costs. The 243-room Conrad received $24 million in city incentives. The new hotel is the third of three key additions advocated by a 2003 study from New York-based PricewaterhouseCoopers LLP. The other suggestions are being fulfilled by Lucas Oil Stadium, which is under construction, and the convention center expansion, which is in the design phase. The study said an expanded convention center could bring in 28 more big events a year, 138,000 more visitors and an additional $165 million in sales. But those gains would not be realized without also adding hotel rooms. The city has lost conventions and turned away others because it doesn't have a large enough convention hotel. "Without the headquarters hotel, the convention center expansion can't work," said Robert F. Bedell, CEO of the Indianapolis Convention & Visitors Association and a member of the hotel advisory committee. "The two are completely tied together." The committee also includes representatives from the Capital Improvement Board, Indiana Stadium and Convention Building Authority, and Indianapolis Downtown Inc., as well as two City-County Council appointments. The group will be asked to complete its work within four to six weeks, but doesn't have an exact deadline, said Barbara Lawrence, executive director of the Indianapolis Bond Bank, which solicited proposals and is coordinating the selection process. The city last spring asked developers to submit ideas for a new hotel or hotel expansion that would add at least 800 rooms near the convention center. The city received five proposals, but rejected two, in part based on assessments of whether they were feasible. One, from dentist Timothy Watson, proposed turning the RCA Dome into a hotel.
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