Evansville’s Catch 22: What a Non-Difference a Year Has Made

The Vicious Circle of the Executive Inn Keeps on Spinning

By: Don Counts,editor and Ralph Edwards, contributor

Note: This article was published nearly a full year ago when the first RFP to attract a hotel developer was posted. A few of the names in elected offices have changed but the realities of the Executive Inn Dilemma have not. We encourage each and every reader to reflect on the conditions that have enabled this fiasco to continue and to work to assure that things like this are never allowed to happen again.

The City of Evansville has posted its RFP (Request for Proposal) and all of those involved along with the interested observers are riveted in suspense to see just what developer will step forward to rescue the City of Evansville from the political no-win situation that its lackadaisical project management on the Arena/Hotel has created. Much like a dependent that dallies with college and wrecks the family budget by needing 5 or more years to graduate, the Weinzapfel administration ignored the obvious structural issues and value analysis in leading the people of this city into an unwanted and unnecessary quandary. The question is not just who the developer will be, it has become how much will the City of Evansville and Vanderburgh County have to subsidize a Convention Hotel to get one built at all.

In all honesty, the Vanderburgh County Commissioners during this period, Troy Tornatta, Lloyd Winnecke, and Stephen Melcher collectively sat on the sidelines as enablers to the Mayor and his Indianapolis based team of advisors, failing to even attempt to perform their duties to manage our tax dollars as “Stewards of the Centre”. As “Stewards of the Centre” the Vanderburgh County Commissioners have taken oaths to provide for competent management of the Centre by assuring its revenue stream is free from avoidable disruption. The co-dependent relationship between the Centre and a Convention Hotel’s disruption was avoidable. Marsha Abell, Candidate for County Commissioner correctly introduced a solution that would have avoided this disruption in a spirited debate with her opponent Commissioner and Candidate for re-election Troy Tornatta last week. The fact that there is no Convention Hotel in operation now and that it is tenuous at best in the future is not due to the earthquake in Haiti. This is the failure of local governance of the City of Evansville Common Council, the Mayor, and the Vanderburgh County Commissioners. One might even call this deliberate indifference (deliberate indifference is the act of knowing what needs to be done and deliberately choosing not to do it). Like Nero fiddling away while Rome was burning, our elected City and County officials just let the Executive Inn dilemma slide into chaos and panic until it was an uncontrollable quandary.

The Evansville Courier and Press opined in an editorial this week that they are willing to wait until the private sector sees a Convention Hotel in Downtown Evansville as a worthwhile investment. The implication of course is that the City of Evansville should not offer incentives to a developer to fill what has been characterized as a desperate need for a Convention Hotel.
The City County Observer agrees with the Courier that private investment is the best way for the City of Evansville to grow. We also believe that any plan to go forward must be grounded in financial reality. As was published by CCO freelance contributor Joe Wallace in his article called “The Executive Inn Dilemma”, the gap between the value of a Downtown Convention Hotel as desired and the cost to build this hotel has to be filled and private investment is not likely to fill that gap. As a reminder the size of that gap is approximately $20 Million.

In the absence of a “Knight on a White Horse” with a crock of gold and a quixotic quest to bail out the City of Evansville’s need to replace the Executive Inn, there are two short term realities. The first reality is to do without a Convention Hotel and the second is to offer an incentive package that is sufficient to induce a first class developer to take on this formidable financial task. By any analysis method chosen, starting from the dilapidated shell that we see today, it is our opinion that this incentive package will have to be quite substantial.

The City County Observer respectfully differs with the Courier’s position of waiting until private money recognizes Downtown as worthy of a $30 – $40 Million investment in a 3-Star or above Convention Hotel. Frankly, in the real estate market of today and the foreseeable future, it could be many years or more before a prudent investor would realize sufficient value to embark upon this project. Evansville does not have years to wait; we have an Arena to fill and a Centre to maintain now. We need a Convention Hotel right now to help pay for the operation of those facilities and to contribute to repaying the bonds issued to build them.

We as a community, willingly or unwillingly have already committed or invested $200 Million in the Arena/Centre/Executive Inn complex. Even if the incentive package has to be $20 Million or more that is only 10% of what is already on the table. In poker terms the expected value exceeds the price to play. The only logical decision at this point is to call the bet and raise the incentive package. When Junior doesn’t finish college in four years, the parent’s best choice is to chastise Junior but to make sure that Junior has the resources to complete his education.

It is time to set the politics of the elections of 2010 and 2011 aside and do what it takes right now to make an investment in a Downtown Convention Hotel attractive and to sign a deal with a capable developer complete with a prudent financing package. Posting the RFP that is not really as much of an RFP as it is a solicitation for interested parties was the right thing to do. Make haste, time’s a wasting; it is still remotely possible to have a simultaneous opening of the Arena and the Convention Hotel. This may be a short term political Catch 22, but the only long term winning solution for the City of Evansville and Vanderburgh County is to protect the $200 Million that is already committed or invested.

It is time for the investment attracting capacity of the Arena to prove itself even if it is just some more public money that gets invested to enhance the quality of life and inspire economic development. It is time for Mayor Weinzapfel, the Evansville Redevelopment Commission, the Evansville City Council, and the Vanderburgh County Commissioners to prepare for the future and do what they all know has to be done. The time for smiling for the cameras is over. The time to finish the job is at hand. The voting public of Evansville and Vanderburgh County deserves stewardship and oversight. It is our prediction that the elections of 2010 and 2011 will be the days of reckoning for all of those who were derelict in their duties.

Note: The City County Observer is a publication that buys in to being fiscally conservative. That constitutes sound financial management from day one. That is clearly not what has happened with the stewards of this project. The oversights, rushes to judgment, and lack of planning have put Evansville into a position to make decisions that should have been disclosed two years ago. Simply because we advocate fixing the Porsche that Junior wrecked does not mean that we would have ever supported getting Junior the Porsche in the first place.