When officials in Fort Wayne wanted to entice a developer into putting up a convention hotel in their Downtown, they agreed to buy land for the project, demolish the existing structures on the site and provide spaces within a new parking garage built by the city.
And that was just the start. Fort Wayne officials also offered more than $1 million for the construction sidewalks, curbs, lights and similar things, an annual subsidy of $250,000 lasting for at least 10 years, income-tax credits a developer could sell to raise cash and the construction of a skyway between the hotel, the historical Embassy Theatre and the Grand Wayne Convention Center.
The result of all of those incentives is the $25 million Courtyard by Marriott Hotel, which White Lodging of Merrillville opened in Downtown Fort Wayne on Sept. 1. Evansville Mayor Jonathan Weinzapfel had an opportunity last week to stay in the hotel when he traveled to Fort Wayne to take part in a conference held by the Indiana Association of Cities and Towns.
Asked about the accommodations, Weinzapfel said, “It’s exactly the kind of hotel we would want to see here in Evansville. It’s that sort of flag, that design and that level of quality we would want to see in a convention hotel.”
White Lodging couldn’t be reached for comment. The company’s Marriott in Fort Wayne contains 250 rooms, 3,500 square feet of meeting a space and a restaurant that serves three meals a day — all features Evansville officials have said they want in a convention hotel.
And the two cities have similar reasons for encouraging the construction of a Downtown hotel.
Fort Wayne wanted a hotel to stand near its Parkview Field, a baseball stadium that opened in 2009. Evansville officials likewise want a convention hotel to serve in part as a place to lodge many of those who come from out of town to see concerts or other events at the new Downtown arena.
Yet Fort Wayne didn’t get something for nothing, and neither is Evansville likely to.
Evansville officials haven’t named the incentives they are willing to offer yet. But an indication of what they will put on the table can be seen in the several similar requests contained in the proposals submitted by the three developers who have so far shown interest in building a convention hotel in Downtown Evansville — including the same White Lodging behind the new Marriott in Fort Wayne. Each of the firms, which also include Browning Hotel Associates of Indianapolis and Woodruff Hospitality of Evansville, wants to build on the site of the parking garage that stands across Walnut Street from the former Executive Inn and is asking for various amounts of help in replacing the 290 parking spaces needed for the hotel.
Each wants the city to demolish the parking garage and the remaining part of the Executive Inn, part of which has already been knocked down to make room for the Downtown arena. Each also wants the land for the hotel site to be provided for a discount, some in exchange for annual lease payments.
John Kish, director of the Downtown arena project, said none of the requests is to be financed by drawing on the property taxes paid by property owners throughout all of Vanderburgh County. The most likely source of assistance is the Downtown Tax Increment Finance District, which collects taxes generated by a rise in property values Downtown and sets aside that money for projects in the same place.
The Downtown TIF district also will be used to pay off the debt the city has taken on to build the arena. The TIF district collects about $6.6 million a year, and about $5.2 million is available to go to the arena or other Downtown projects.
But Evansville can’t follow in the footsteps of Fort Wayne along all paths. For one, Fort Wayne has a special economic-development mechanism known as a Community Revitalization Enhancement District in its Downtown.
The district let White Lodging secure $6 million worth of tax credits that will lower the amount of income taxes a company owes to state government. Recipients of the credits don’t have to use them but can instead sell them to other companies as a way of raising cash.
Evansville doesn’t have a Community Revitalization Enhancement District and its chances getting one are slim. State government, after seeing government revenues take a plunge in recent years, has grown reluctant to give away its right to claim certain tax money.
Greg Leatherman, executive director of the Fort Wayne Redevelopment Commission, said Fort Wayne didn’t give money to the project without having expectations of a return. As part of its deal with White Lodging, the city can collect $1.50 a day from everyone who parks in the 250 parking spaces reserved for guests of the hotel.
Fort Wayne also gets to collect up to $750,000 a year in the sales and income taxes generated by the hotel, ballpark and other properties in the Community Revitalization Enhancement District. And it gets to collect additional room taxes from the guests staying at the new Marriott.
As for the proposed convention hotel in Evansville, at least a couple of the developers interested in undertaking that project have likewise proposed mechanisms for given the city a return if they succeed. Those offers, as much as any incentives, will be weighed by local officials when they choose a company for the project.
Last week, members of the Evansville Redevelopment Commission got together to discuss negotiation strategies. The meeting came several days after they had received the responses to a preliminary request for hotel proposals, which was issued last month.
Kish said he was glad to see the responses contained similarities, which means the city can be more specific in what it asks for when issuing a formal request for hotel proposals in the next few weeks.
“We remain very optimistic that Evansville will again see a quality Downtown hotel connected to the convention center and the new arena,” Kish said. “And the public participation necessary to make this happen will be commensurate with the economic impact of a revived convention business Downtown.”