Indianapolis signs off on hotel financing
The Indianapolis City-County Council unanimously approved plans to issue $16.7 million in bond anticipation notes to help finance a $141 million plan to redevelop two historic downtown Indianapolis buildings.
The city anticipates issuing about $17.5 million in developer-backed bonds to help finance the project. Keystone Realty Group is the developer.
Keystone is seeking the money and the city’s partnership as part of a $141 million redevelopment plan for the Illinois Building at 17 West Market Street and the former AT&T building at 220 North Meridian Street. Keystone plans a 180-room Intercontinental Hotel in the Illinois Building and a mixed-use high rise office and residential building at the former AT&T office building.
The developer would use 80% of the tax revenue generated by the projects to pay off the bonds, which last for a period of 25 years. The projects are both in the consolidated downtown tax-increment financing district.
In return for its financing help, the city is getting a 5% equity stake in the Intercontinental Hotel, a similar arrangement to what it has at both the Conrad Hotel and the JW Marriott.
Cost of the Intercontinental project is estimated at $61 million and at $80 million for the redevelopment of the former AT&T building.
The Illinois Building currently generates about $420,000 per year in tax revenue, largely from ground floor restaurants.
The former AT&T building generates about $120,000 per year for the city in tax revenue. The city anticipates receiving an additional $341,000 in annual taxes from the buildings once the projects are completed.