City finalizes Hammons' downtown hotel deal

Mary Lilly Smith, the city’s economic development director, updated council members at a Jan. 22 luncheon on the terms of the final agreement and pointed out three minor differences from the deal’s term sheet, which council approved in October.

The term sheet called for Hammons to buy the 1.7-acre plot next to Jordan Valley Car Park on St. Louis Street and the city-owned car park for $7 million, build an Embassy Suites hotel on the vacant land and continue operating and make improvements to the adjacent Springfield Exposition Center.

Under the final terms, Hammons must close on his purchase of the land by Sept. 30 and begin construction within 60 days. The term sheet had stated both actions must be done by Sept. 30. Construction must finish within two years.

Flexibility

The finalized agreement also gives Hammons flexibility in choosing which hotel to build – stipulations only state he must build a hotel franchise with a nationally recognized name, a favorable reputation with business travelers and a national reservation and points accrual system.

“The intent still remains,” Smith told council. “It just gives him a little more leeway if there’s a franchise that he feels is more desirable to the community than the Embassy Suites.”

A third change to the agreement relates to the initial requirement that Hammons provide certain equipment in the preparatory kitchen that he has agreed to construct in the expo center.

The deal now states that Hammons will install additional refrigeration, portable warming ovens, dishwashing equipment and a new beverage station only if the city requests them and if Hammons deems them necessary.

Smith said the full-service kitchen in the adjacent hotel could serve the expo center’s need for the equipment, but questions arose over what would happen if Hammons ever relinquished operation of either property, severing the possibility for equipment sharing.

John Q. Hammons Hotels Vice President of Development Scott Tarwater assured council that Hammons has no intention of cutting ties with the center – under the agreement, his operating lease would extend another 20 years with four five-year renewal options. Tarwater also noted that the same equipment is available at Hammons’ other hotels and convention properties in the area and could be transferred to the expo center if needed.

The finalized agreement will go before council at its Jan. 28 meeting and could go to a vote at the council luncheon the following day.

This story originally appeared in SBJ’s Jan. 22 free Breaking E-Newsletter. Click here to register.