The cash-strapped developer of a downtown Evansville hotel located next door to a high-profile new arena plans to turn the property back over to the city.

Indianapolis-based Browning Investments said it was unable to secure sufficient financing to complete its plans for renovating the existing 400-room hotel into a 250-room facility.

Part of the hotel has already been demolished to make way for the new $127 million arena that city officials have touted for years as a way to revitalize Evansville.

The hotel is also located near the city’s convention center.

City officials plan to seek a new developer for the project, according to local reports.

Evansville in April issued $120 million of bonds to finance construction of the new 11,000-seat arena.

The city plans to tap into several sources to pay off the debt, including tax increment revenue and revenue from a casino boat that floats in the Ohio River not far from the new arena site.

The arena, already under construction, will anchor one end of Evansville’s main street, with the other end anchored by the floating casino. City officials hope construction of the project can be completed by the end of 2011.

The University of Evansville-Indiana’s basketball teams will be the arena’s major tenants.

Other tenants will include professional hockey teams and musical acts, officials said.

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