2007 The Year in Business, No. 7: City finalizes plush hotel, BKD headquarters deals

Hotelier John Q. Hammons pulled out a fourth-quarter victory after a yearlong battle for the rights to build a plush center city Springfield hotel, and a Kansas City firm was selected to build a new corporate headquarters, keeping a major company in the heart of Springfield.

City officials viewed both deals as coups – they secure at least $60 million of new investment – but they exhausted two rounds of requests for proposals getting there.

In the second round, the 88-year-old Hammons outlasted three other developers in October for the exclusive right to build a “four-star” hotel on 1.7 acres next to Springfield Expo Center. The city-owned lot was originally slated for a multipurpose arena backed by Hammons.

As part of the deal, the city sold Hammons the vacant St. Louis Street lot and the adjacent city-owned parking deck for $7 million. Terms of the agreement, approved Oct. 22 by City Council, spell out Hammons’ plan to build a seven- to 10-story Embassy Suites hotel with 150 to 200 rooms by Sept. 30, 2010. The $35 million development, for which construction must start by Sept. 30, 2008, also must include a full-service restaurant and covered connections to the car park and Springfield Expo Center, according to the agreement.

Kansas City-based Opus Northwest, which was among the original four developers vying for the hotel deal, emerged with the development contract for acounting firm BKD LLP’s headquarters. Opus Northwest will build a 100,000- to 120,000-square-foot office building, which will have at least five stories, on the eastern end of the parking lot serving Hammons’ University Plaza and Convention Center.

The city originally said BKD’s headquarters should be incorporated into development of the arena site, if possible.

In July, the Springfield Tax Abatement and Tax Increment Financing Commission forwarded four development proposals to city officials for further negotiations. HCW Evergreen, BC Development Co. of Kansas City and John Q. Hammons Hotels & Resorts LLC each submitted hotel-office tower proposals, while Opus Northwest LLC, also of Kansas City, pitched a BKD headquarters building and a “pad” for a future hotel.

BC Development was deemed unresponsive by the city after its representatives failed to respond to a request for additional information in July. And Branson developer Rick Huffman, representing HCW Evergreen, bowed out in September citing Hammons’ Expo Center operating agreement.

“We read the lease on the (Springfield Expo Center) … and based upon how that lease was structured with Mr. (John Q.) Hammons, I think it makes it very difficult for us to make a hotel and new ballroom work and connect to the (Expo Center),” Huffman wrote in a letter to City Manager Bob Cumley. “We had real second thoughts when you read that lease and see that Hammons pretty much has control. ... We just don’t want to play the game.”

Hammons will build the Embassy Suites on a site his senior vice president of development, Scott Tarwater, once said was not financially feasible to develop as a hotel.

“We at John Q. Hammons Hotels just couldn’t make it work,” Tarwater told TIF commissioners in February.

Hammons initially pitched a corporate office building for BKD on the site and two weeks later vowed to build a new hotel in the UP parking lot when the TIF Commission passed on the proposal. The hotelier was unable to explain the about-face.

“There’s no good answer for it,” Hammons told reporters.