Hotel site downtown

Work continues on the downtown hotel site on Superior between Main and Union Streets on May 17, 2019. Tim Bath | Kokomo Tribune

Updated details are expected to emerge early this week, possibly by Monday, about the downtown Kokomo hotel and conference center project, which is moving forward with a new developer and as-of-now unknown changes.

Howard County Commissioner Paul Wyman confirmed to the Tribune that a press release will be distributed early in the week with “pretty detailed” information about the project’s aesthetics and development future.  

“Sometimes when you have a bump in the road or some changes that happen, sometimes it creates opportunities,” said Wyman, who declined to discuss specific changes but said “a mixture of things” are included.

“And I think there’s been some opportunities in here to really enhance the project, and I’m excited about that.”

The new information will follow a week of movement in the form of official documents involving the project’s partners and pieces of their financial commitments.

It constituted the most significant public activity since news broke in early May that the project’s initial developer, Dora Hotel Company, had stepped away from the project.

Still, it is unclear how much will be known about the project’s full, exact funding mechanisms even after the upcoming announcement. Public officials have said negotiations are ongoing.

Regardless, any public progress, along with a renewed flow of information, will be welcomed with open arms by people who have stake in the project but exist outside its inner circle.

City officials, meanwhile, declined to answer questions about the project and its timeline and funding plan for this story, instead sending a one-paragraph statement.

“The new hotel, conference center, and automotive museum is a great opportunity for our community,” said the statement, distributed by Deputy Mayor David Tharp.

“It has involved multiple partners to get this far, including the City, the County, GKEDA and the CVB/CVT, the Automotive Museum, and private sector partners. All of the partners in this project look forward to sharing exciting details soon.”

MOU and LOI

The project’s most public discussion took place Tuesday when the Howard County Council unanimously approved a measure allowing President Jim Papacek to sign a Memorandum of Understanding between the county and city of Kokomo.

The MOU commits the county to $150,000 out of the Board of Commissioners’ Economic Development Income Tax budget each year for 15 years, totaling a $2.25 million commitment.

Wyman confirmed the total will be the county’s full contribution to the project and is “designed to support the entire project.”

The county’s current EDIT balance is roughly $3 million, and it receives around $1.2 million per year into the account. The commissioners are allocated half of that annual revenue.

 “I think I can go for this commitment on the belief that it is good for the community as a whole. It’ll help keep the momentum going. … It’ll be hard to swallow from my conservative perspective, but so be it. I think it’s good for the community,” said Howard County Councilman John Roberts about the 15-year commitment.

The project is slated for the block between Main and Union streets, bordered by Superior Street to the north and Wildcat Creek to the south and will include a Hilton Garden Inn and conference center.

Wyman said the city will pay the same amount of money over the 15 years, along with “millions of dollars on top of that, which is a whole [separate] funding mechanism.”

“If you look at the site prep work they’ve already done and the purchasing, demoing, all that kind of stuff, they’re already millions into the project that they’ve paid for,” he said, referencing the city, which unveiled a financing plan involving bonds and cash reserves before the developer change.

Previous estimates placed the cost of the hotel at $18 million and the conference center and included auto museum at $8 million, although specific numbers involving the new developer have not yet emerged.

“Those numbers are all being negotiated right now, and again I’m not interested in negotiating those on the front page of the paper,” Wyman told council members.

In addition, leadership from the project’s partners – the Howard County Convention, Visitors and Tourism Commission and Convention and Visitors Bureau; Howard County; city of Kokomo; Kokomo Community Development Corporation; and the still-unnamed developer – moved forward this week with a Letter of Intent.

The LOI, explained Greater Kokomo Economic Development Alliance President and CEO Charlie Sparks, is a non-binding agreement that sets the framework for the development agreement. The Alliance manages the CVB and CVT.

An official development agreement is expected to be implemented after the public announcement.

‘The sooner … the better’

Local officials have maintained that despite the developer change and other project alterations the Kokomo Automotive Museum remains a vital part of the downtown hotel and conference center project.

Wyman, for instance, told council members that “having a forever home for that museum I think for our community is incredibly important. And being able to house that underneath the conference center, it’s unbelievable.

“The developers are thrilled about it. How they are looking to incorporate it is exactly how any of us would envision that museum being incorporated.”

Nonetheless, a sense of anxiety has persisted among museum staff still awaiting information that could drastically alter the site’s future.

“Not much has changed on our end over the past few weeks. I have not been contacted by anyone in authority and as trite as it sounds, I only know what I read in the paper!” said Jeff Shively, the museum’s director of development, in an email.

“Yes, we are concerned about the situation. Even though the museum facility has been closed for just over a year, we still have expenses. The cars in the collection must be insured and maintained. There is payroll to meet. The good news is that our fundraising has been very successful so far despite the trying circumstances, as evidenced by the Evening of Fun and Fortune in April.”

The museum vacated the Kokomo Event and Conference Center in May 2018 after more than two decades at the North Reed Road site. By that time, plans to move the museum into the future downtown conference center had been public for months.

A few weeks ago, said Shively, he toured a 1936 Ford exhibit at the Early Ford V-8 Foundation Museum in Auburn. The museum, he noted, was completed by a design firm that has been in talks about working on the incoming Kokomo site and “has some desirable features that would work in a downtown Kokomo museum.”

“However, it is tough to move forward in a meaningful way until more is known about the nature of the downtown convention center space. For example, just a two-foot difference in ceiling height would radically change the plan for the museum,” said Shively, who has already given presentations to local officials about the museum’s vision for its future home.

“The same is true of the shape and square footage of the facility. The number, location, and size of the support columns also factor into the layout. At this point, none of these details have been confirmed, so everything remains in the realm of the hypothetical.”

Still, Shively is hopeful the Kokomo museum could take a similar route as the Cadillac La-Salle Club Museum and Research Center, which he said after years of unsuccessful fundraising for a permanent building was able to commission a design at the existing 90-acre Gilmore Car Museum campus midway between Detroit and Chicago; break ground in 2013; and open in 2014.

Two years later, he said, the CLCMRC museum was out of debt.

“More money was raised in two years than had been raised over the previous two decades,” noted Shively. “Can the same thing happen in Kokomo? I would say yes, but the sooner we can begin the process, the better.”

Worries about TIF

Although he voted to allow Papacek to sign the MOU after a failed attempt at tabling the measure, and despite his general support for a hotel and conference center project, Howard County Councilman Stan Ortman has concerns about the county’s role in funding the downtown development.

Ortman’s primary quarrel is “putting county taxpayer money into a TIF district that we get no benefit from.”

A TIF, or Tax Increment Finance, district is a specific geographic area where property tax revenue raised on new assessed value is captured by the city’s Redevelopment Commission (RDC) for investment in the TIF area.

TIFs are a common, although at times controversial, economic development tool.

Howard County Auditor Martha Lake explained in an email that “the new structure for the hotel will be assessed in Kokomo’s TIF District and the taxes will go to the [RDC]. The other entities including county, trustee, library and school system will not receive property taxes on any of the new development.”

Lake continued about the project’s tax possibilities: “If the conference center is assessed as a not-for-profit no taxes will be billed, [but] if there is a lease or if any portion of the center generates income, then taxes could possibly be billed. But, the hotel will be taxable, unless the city decides to abate the structure. I have not seen any agreements between the city and the developer yet.”

Ortman is no fan of that setup, saying he’s had conversations with county officials across Indiana and outside the state and has “not talked to anybody that thought they would do that with their local government funds,” meaning a county government body helping fund a project inside a city TIF district.

“It’s just always been my investment philosophy or whatever that you don’t – this is going to be a donation. We are participating in a project and we get nothing out of it. So if that’s what the powers that be want to do with taxpayer money, that’s up to them, and that’s what’s being done,” he said.  

“The county gets their income primarily from property taxes, and we’re shut out of this one through the TIF district,” added Ortman.

Ortman was also critical about the amount of financial information being shared and what he believes was a premature project announcement in July 2018.

“It’s never been presented to us in black and white of what is the hotel, what is the conference center, what’s the cost of this and everything. And normally I don’t invest money without having some particulars,” he said.

Ortman added: “Don’t announce a completion date before you’ve got things signed and in place. How long ago has it been that we were all notified this thing was going to be done in spring of 2020, I believe? And we don’t even have a final agreement yet. To me, that’s embarrassing.”

Wyman, however, countered by referencing a collection of benefits he believes outweigh any TIF concerns, while also defending what he said are commonplace development setbacks.

The project, he said, will generate increased revenue in other areas and boost community exposure and possibly entice people staying at the new Hilton to visit Kokomo and Howard County again – and maybe even move here.

“This is a logical place for this project to happen, and … the overall impact of this project to our community outweighs whether it’s in a TIF district or not. The truth of the matter is that the county will benefit because of jobs and people paying income taxes and economic development income taxes, so the county will still receive a benefit from that,” said Wyman.

“There will be sales tax generated, and the county receives a benefit from that. There’s benefits greater than property taxes to a project like this. And the other benefit is that this will spur other development and growth in the downtown area, which will also generate more revenue in the future for [county government]. So from that standpoint I look at it in its totality, not in any one specific, small segment.”

He added: “There’s so many positive aspects that the fact this is in a TIF district just doesn’t even register as a concern for me.”

Wyman went on to say with “projects this size, it’s not uncommon to have bumps in the road. If these things were easy, everyone would do it.”

“I’m not disturbed by it at all. I work on many different development projects and seeing some delays here and there, although at times it can be frustrating, the reality of the matter is the end result always ends up being good.”

George Myers can be reached at 765-454-8585, by email at george.myers@kokomotribune.com or on Twitter @gmyerskt.

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