Home Uncategorized Hunden Downtown Hotel Study: Some Simple Financial Details

Hunden Downtown Hotel Study: Some Simple Financial Details

10

Never Forget What Lack of Planning Causes

The City County Observer has finished a simple overview of the Hunden Study that was commissioned by the Winnecke Administration to be told what would need to be offered to have a decent probability of attracting a quality developer to take on the 4 year non-started downtown hotel project. Overall, we must say that Hunden did a very thorough analysis and has reached conclusions nearly identical to the conclusions published by CCO editor Joe Wallace two years ago.

The Hunden findings for a 240 room hotel are as follows:

Hotel financial value: $24 Million

Developer Down Payment: $6.2 Million

Private Loan: $17.8 Million

Required Public Subsidy: $7.3 Million excluding parking, bridges, and infrastructure

Public Infrastructure Spending Requirements:

Parking Garage: $5.4 Million

Bridges: $2.3 Million

Infrastructure: 1.6 Million

Total Public Money Required to Attract a Developer: $16.6 Million

Total Cost of Project (excluding interest charges): $40.6 Million

10 COMMENTS

  1. $16.6 Million in taxpayer dollars. Does that amount not trigger a referendum on the hotel?

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    • they could possibly break it down into 10 seperate projects to avoid public input. Winneke is about as sneaky as Weinzapel

  2. REUTERS

    Municipal Bankruptcy Could Have Lasting Consequences for Weak Local Governments

    6-28-12

    * * * * * * * * * * * *

    [snip]

    Chapter 9 gives municipalities fewer tools than businesses get in much more common corporate bankruptcies, according to George South, a bankruptcy lawyer and a partner in DLA Piper in New York.

    “Municipalities don’t generally sell assets” to reduce debt, South said. “They usually don’t sell a public service. There’s also politics. In Chapter 9, you may need legislative help to get new revenue sources.”

    Cities and counties that have filed for Chapter 9 bankruptcy protection will have trouble for years borrowing in the muni market, the main financing arena for U.S. local governments, according to John Mousseau, managing director and portfolio manager at Cumberland Advisors.

    [snip]

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  3. Wallace hit these numbers perfectly over two years ago and no body in government would listen to him. I got the feeling from his articles that he figured it all out in a couple of hours. It only took Evansville 4 years, 2 administrations, and over $100,000 to Hunden to reach the same conclusions.

    The last I heard he had moved to California.

    • Rev., Joe Wallace did nail it years ago. Most everyone not associated with the Weinzapfel administration and the Democrat Central Committee also figured it out.

  4. A. You have to have a lower LTV than 75%; this hotel is not being built in fantasyland, so that LTV is not low enough. Mr. Rourk and Tattoo would have to build this at this LTV.

    . The $24MM value is too high; you can’t get the room rates they think they can get unless it is subsidized. I doubt you will get less price sensative customers given our convention history..we are not going to get a NATO summitt here..people that come here will be doing it economy class.

    • I think those numbers pretty much eliminate any of the locals in the “good old boy” network.

  5. Grest job Joe Wallace in your personal vetting of the proposed Downtown Hotel project 2 years ago.

    Only if the past political idiots would had listened to you the city would had saved thousands of taxpayers dollars on this project.

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