Indianapolis, Indiana – Officials in Indianapolis are looking to request approximately $54.3 million from the Metropolitan Development Commission. This funding would be used to buy Pan Am Plaza from the Kite Realty Group Trust, as city documents show.
A city spokesperson, Mark Bode, said that the city needs to own the land where the Signia hotel project is planned to use public funding to finish it. He stated that Kite would stay on as the developer and the city would become the sole owner of the completed building.
The city is planning to finance the $510 million Signia by Hilton project, a 40-story hotel with 814 rooms, at the Pan Am Plaza. The financing was necessary as Kite was unable to secure funding. The City-County Council is now looking at a request for up to $625 million in hotel revenue bonds to fund the hotel’s construction.
Typically, the city would propose the average of two appraisals, which amounted to $29.6 million, as the offering price for the land situated at the southwest corner of West Georgia and Illinois Streets. However, a resolution on this Wednesday’s agenda suggested that because Kite paid more for the land than the appraisals valued it, the city asked to offer a higher price.
The resolution indicated the city’s intention to seek purchase authorization for nearly double the market value, citing the project’s significant importance to the city’s tourism economy. It also emphasized the necessity of the project’s location, which needs to be close to the Convention Center project.
The resolution also pointed out that swift action is required to start and finish the Pan Am Plaza Project’s construction to secure future contracts for key conventions.
Stakeholders view this project as critical for attracting future convention business and maintaining existing business, as Visit Indy executive Chris Gahl previously explained.
The Hilton by Signia project has been in the planning stages for several years. It was initially announced as part of the now-$200 million expansion of the Indiana Convention Center. In 2018, Kite first revealed its plans to build two luxury hotels at the Pan Am Plaza.
However, the developer faced challenges in securing financing for the project. The original proposal from Kite included building a second Hilton hotel depending on demand over several years. Still, city officials stated they would watch the demand and evaluate if a second hotel is required.
The request will be considered by the Metropolitan Development Commission on Wednesday.