As convention center hotel projects multiply across the Midwest, some of them bond-financed and others still embryonic, issuers are taking different lessons from pitches by consultants.
Rockford, Illinois, is moving forward with plans to bond for a hotel and convention center tied to Hard Rock Casino Rockford.
Following a market assessment by a gambling consulting firm, the city formed a public-private partnership with Hard Rock Rockford, authorized $103 million of taxable general obligation alternate bonds and said it planned to establish a sales tax and revenue bond district in cooperation with Winnebago County.
Rockford's City Council acted on an April hotel market, gambling market and economic impact study by The Innovation Group, which bills itself as "the premier consultants for gaming and leisure."
In
The hotel and convention space would be connected to the Hard Rock Casino, which opened in 2024 on the outskirts of the city of 147,000.
The $103 million of Series 2026 taxable general obligation alternate bonds will fund the construction of a hotel and convention center. They will be repaid from Hard Rock's project cash flow, with bond payments backstopped by regional gambling tax and other casino tax revenues.
"The only meaningful exposure to the City would be the unlikely scenario in which the integrated hotel and casino cannot service the bond from operations," Cagnoni wrote.
The partnership with Hard Rock will also involve the creation of a STAR bond district and state enterprise zone benefits to cut construction costs, the memo said.
In the end, taxpayers are the ultimate backstop; in the ordinance authorizing the bonds, the city council pledged "ad valorem property taxes upon all taxable property in the city without limitation" to pay principal and interest on the bonds if Hard Rock's revenues fall short.
Speer is the financial advisor on the deal and Chapman and Cutler is bond counsel, according to the memo.
To boost future hotel and convention center business, Rockford went further. In a
The RTID was proposed by the city's convention and visitors bureau, GoRockford, and would include the cities of Rockford, Loves Park and South Beloit and the village of Cherry Valley, with Rockford the lead jurisdiction.
The district would "provide benefits to payors by funding tourism promotion efforts for hotels" in the greater Rockford area, according to the resolution.
The city council approved the RTID at
Rockford City Administrator Todd Cagnoni did not respond to requests for comment, nor did four aldermen contacted by The Bond Buyer.
Milwaukee ho-hum on hotel
Officials in Milwaukee have been unenthusiastic about another consulting firm's recommendation for a new convention center hotel.
"There is no active planning underway," Milwaukee Alderman and Wisconsin Center District board member Robert Bauman said by email, noting that the WCD fired its CEO this summer.
The WCD owns and operates Milwaukee's convention center, Baird Center, as well as Miller High Life Theatre and the UW-Milwaukee Panther Arena.
Former CEO Marty Brooks spearheaded Baird Center's recent $456 million
There was some pushback against Hunden's suggestion that the 117-year-old Miller High Life Theatre be demolished to make way for a new hotel, according
At the May 15 WCD board meeting, Bauman said the study committee, of which he was a member, was "an exercise that was thrust upon us by
"There are obviously some issues that happened, you know, outside of our purview and control, that were unfortunate," said Rob Hunden, president and CEO of Hunden Partners, referring to the situation involving Brooks. "We 100% stand behind the study, and... we would never let any single client direct us to any sort of conclusion. Our conclusions are independent, and we deliver them, and then it's up to the client how they're going to put that into the public realm."
Hunden said his firm was charged with finding "the highest and best use" of the parcel next to Baird Center. In the middle of the country, "there are probably three dozen cities that have convention centers, and they all have convention headquarter hotels, single or multiple," he said. "Milwaukee has, for many years, been behind the eight ball in that regard."
His firm has found that the addition of a convention center "headquarter" hotel creates a virtuous cycle of sorts for neighboring hotels, while cities that neglect to build such a hotel "actually their primary and secondary sets of hotels around the center do not perform as well as those who have made those investments," Hunden said.
The other study committee members were less critical.
But only Milwaukee County Comptroller Liz Sumner defended the plan, saying the committee's unanimous finding that Milwaukee needs a convention center hotel should not be shelved without further action.
Beyond that, the study committee largely punted everything to the exploratory committee.
"We have underutilized hotel rooms in this city, and the question was, if we add a hotel, is it going to cannibalize or is it going to stimulate?" said study committee member Dennis McBride, the mayor of Wauwatosa.
He said Visit Milwaukee — formerly the Milwaukee Convention and Visitors Bureau — told them in a presentation that Milwaukee has plenty of hotel rooms, but many are "not within the radius that convention operators want to see."
A spokesperson for Visit Milwaukee did not respond to requests for comment.
Bauman said by email that Baird Center is near several hotels, and there are "no concerns about (its) long-term viability."
In the WCD board meeting, Bauman didn't rule out future financing help for local hotels, saying, "We can maybe reevaluate the question of incremental hotel growth, in partnership, perhaps, with the city of Milwaukee, through tax increment financing" at a later date.
Toledo follows up on expansion
All three Lucas County commissioners approved the sale of Series 2026 economic development nontax revenue bonds for a redeveloped downtown Toledo hotel at their Aug. 25 board meeting.
The Hilton Garden Inn and Homewood Suites opened next to the Glass City Center convention venue in 2022 after a major remodeling of an older hotel building.
The Glass City Center itself underwent an expansion and revamp that opened in 2022.
At
"This benefits the county," Hayes said. "Instead of having the full principal amount renewed every year without ever paying down the actual debt, this will allow us to amortize the debt over a fixed schedule with a known budgeted amount."
Huntington Capital Markets priced the $26.325 million taxable bond deal in September to yield from 5.203% for a 2027 maturity to 5.72% for 2036.
The deal was rated AA by S&P Global Ratings.
Debt service payments are to be made from revenue received under the operating agreement, which includes the developer, Continental, as well as the Lucas County Economic Development Corporation and Toledo PI Acquisitions, LLC.
Squire Patton Boggs was bond and disclosure counsel, and Stifel the municipal advisor, according to the official statement.
A spokesperson for the three Lucas County commissioners did not respond to requests for comment. Lucas County's director of economic development did not respond to questions by press time.
