City officials have agreed to pay $48.5 million of the $300 million cost of building a 1,000-room JW Marriott hotel in downtown Indianapolis, but a profit-sharing agreement that is part of the deal isn't likely to yield payments for the city, a hotel industry expert said.
Developers of the convention hotel signed a final deal with the city Dec. 20. The contract calls for the city to receive 25 percent of adjusted profits--but only after the developers make at least a 16 percent return on all development costs.
That means the developers, Merrillville-base White Lodging Services and Indianapolis-based REI Real Estate Services, can cover their expenses and make about $48 million in profit before passing anything along to the city--a situation that certainly won’t occur anytime soon, if ever, said Rob Hunden, president of Chicago-based hotel consultant Hunden Strategic Partners.
“It’s a nice gesture,” but probably only a gesture, he said of the profit-sharing requirement.
Is there ever anyone in the room looking out for the taxpayers when these deals are brokered? You hear me bitch about it all the time, but it's a point I keep making when you put in key positions of government people who are totally beholden to the city's largest law firms and key business interests. The best interest of the public as a whole will always take a backseat to the interests of a select few who believe our government operates for their benefit first and to the public's benefit secondarily. These one-sided deals have got to come to an end. Our city is financially broke. If we were a business, we would have to declare bankruptcy. As a governmental entity, the city will simply tax and borrow more to make up for these bad decisions.
Remember who is behind this deal for the J.W. Marriott. It involves the billionaire family of Dean White. It also involves Michael Wells, a close adviser to former Mayor Steve Goldsmith. The old Goldsmith gang is moving in quickly to take control of the new Ballard administration. People should never forget the smoke and mirrors budgeting of the Goldsmith administration, which saddled us with more than a half-billion dollars in debt for which we will be paying for many years to come. Mayor-elect Greg Ballard would be wise to read up on the Goldsmith Myth before biting off too much of the governing ways that old gang will most assuredly try to sell him on in the coming months.