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City Beat: Council wrestles with Expo land transaction

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City beat from the Nov. 28 City Council meeting: For minutes and schedule, visit springfieldmo.gov/citycouncil
Springfield City Council gave first reading Nov. 28 to a resolution that would terminate a 2008 agreement between the city and the John Q. Hammons Revocable Trust, and allow the city to repurchase a 1.7-acre lot adjacent to the Springfield Expo Center for $1.

Though several members expressed their concerns about repurchasing the land valued at roughly $1 million while John Q. Hammons’ management company is still under contract to operate the Expo Center, council members appeared to agree that building a planned hotel on the tract could only begin after buying back the land.

Council is expected to vote on the resolution at its Dec. 12 meeting. The bill allows for up to $5,000 available to cover closing costs on the transaction.

Thomas Bieker was among the council members concerned by Hammons’ 25-year contract to manage the Expo Center through 2027 with options for renewal. He said the city might have difficulty securing a developer willing to connect to the facility without the ability to book events.

“I don’t think it’s feasible to have a hotel owned by one group and have a management contract on the Expo Center with another,” Bieker said.

Christopher DiDonato was the only member of the public to speak on the bill. Indicating he was a member of the Occupy Springfield group, DiDonato credited the city with handling the land repurchase decision with transparency, and he encouraged council members to approve the buyback on the hopes a hotel development there would produce local jobs.

“I hope that you vote ‘yes’ and create jobs for this city,” DiDonato said.

Economic Development Director Mary Lilly Smith said discussions concerning what the city could do with the land began about a decade ago. The property, which was included in a 2002 land deal as part of a larger agreement that gave Hammons rights to manage the Expo Center, had been slated for an arena. However, plans changed after Missouri State University secured funding, in part from Hammons, for JQH Arena and built it on campus. In 2007, the city sought to select a developer to build a full-service hotel that would connect to the Expo Center to draw convention business to the city.

Hotelier Hammons, who owns several nearby properties, was selected based on his three-part plan. First, Hammons would buy the city’s parking facility just west of Hammons Tower for $7 million. Smith said the city was subsidizing that facility to the tune of $500,000 per year, and it wanted to unload that obligation. Second, he would allow a former Hammons Tower tenant, accounting firm BKD LLP, to build its headquarters on his University Plaza Hotel parking lot. Third, he would develop a full-service Embassy Suites hotel connected to the Expo Center.

The first two conditions were met, but as the country entered into the recession, Hammons asked the city to delay the Sept. 30, 2008, deadline for starting construction of the hotel. After a second deadline was missed in April 2010, city leaders worked with John Q. Hammons Hotels & Resorts and the Springfield Convention & Visitors Bureau to hire Chicago-based Hunden Strategic Partners to find the best use for the land. In August, Hunden presented its final report, which called for a public-private investment of more than $100 million to establish a hotel, an entertainment district and fund renovations to the Expo Center. City leaders asked for a follow-up economic impact study, which should be completed in December.

Following the Hunden report, Hammons officials indicated they wanted the city to repurchase the land and terminate its contractual obligations. In late October interviews, Hammons’ executives told Springfield Business Journal that the company has been unable to secure financing for large hotel projects since the beginning of the economic downturn in 2008.

Smith said the city would need to address the Expo Center management contract separately because Hammons’ properties are part of a Community Improvement District that funded debt service on the Expo Center, Smith said.

E-Verify
With a 6-2 vote, council approved one of three possible ballot questions stemming from the successful E-Verify initiative petition. The petition drive by Ozarks Minutemen asked registered voters to support an ordinance requiring city businesses to use the free federal employment-verification software program, E-Verify. Springfield citizens will vote on the matter Feb. 7.

Jerry Wilson, who represented the Ozarks Minutemen at the Nov. 28 meeting, spoke in favor of the city’s original version of the ballot question, saying it most accurately represented the intentions of the petition drive.

“We think voters can read this the first time and get it,” Wilson said, acknowledging that the city’s legal staff felt using language about an administrative law judge determining who could face penalties could be overturned in a court challenge.

More recent versions of the ballot question say the director of finance could determine when a violation has occurred.

Wilson objected to Substitute No. 1 – the bill that council approved for the ballot – and Substitute No. 2, which included definitions of a business entity. Substitute No. 2 added a fiscal note that the city’s cost from the measure was unknown.

Cindy Rushefsky was one of four council members who supported letting voters know on the ballot that the cost to defend and enforce the ordinance was unknown. Mayor Jim O’Neal, Councilmen Robert Stephens and Scott Bailes also voted for the Substitute No. 2 bill.

“I think voters should get a fair picture of what it is they’re voting for. The fiscal note should be attached to it. We don’t know what this is going to cost,” Rushefsky said.

In September, council had the option to approve the ordinance or present it to voters.[[In-content Ad]]

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