City outlines deal for downtown Hammons hotel

The hotel, which will stand between six and nine stories, will have between 150 and 200 suites and a full-service restaurant that serves three meals a day, Scott Tarwater, vice president of development for John Q. Hammons Hotels & Resorts Inc., told Springfield City Council members at their luncheon today. (Click here to view the site plan of the proposed developments.)

City officials have drawn up a term sheet outlining the deal with Hammons, who did not attend today’s meeting. Hammons’ new hotel will provide covered connections to the car park and the Springfield Exposition Center just west of the city-owned parcel. Hammons has also agreed to build 15,000 square feet of additional meeting space between the hotel and expo center.

City Council is expected to consider a resolution approving the term sheet with Hammons at its regular meeting Monday.

Under the agreed-upon terms, the hotel and car park will receive 100 percent property tax abatement for 10 years and 50 percent for another 15 years after that. The city also has agreed to exempt construction materials for the hotel from sales tax.

“I think we have a deal that’s very favorable to the city,” said city consultant David Queen, an attorney with Gilmore & Bell PC in Kansas City.

A second dimension of the deal involves BKD LLP accounting firm, which is negotiating privately with Kansas City development firm Opus Northwest for a new headquarters on Hammons-owned property at the southwest corner of John Q. Hammons Parkway and St. Louis Street.

Opus Northwest has agreed to build the 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 University Plaza and Convention Center. Hammons owns and operates UP, which is just south of the Embassy Suites site.

Tarwater said the Embassy Suites would not compete with, but complement, the older hotel.

Under the proposed agreement, Hammons must close on the property and car park, and begin construction on the hotel no later than Sept. 30, 2008. If the deadline is not met, the city is authorized to terminate tax abatement, repurchase the land for $1 and amend its operating agreement for the expo center with Hammons to take control of a 90-foot easement on the center’s east side. Construction on the hotel is expected to take about two years, Tarwater said.

Other developers interested in building a hotel on the site were HCW Evergreen of Branson and Kansas City-based BC Development Co. HCW Evergreen formally withdrew its proposal in mid-September after reviewing Hammons’ operating agreement for the expo center, and BC Development was deemed unresponsive by the city after its representatives failed to respond to a request for additional information in July.

Read SBJ’s Oct. 22 issue for more about Hammons’ deal with the city.[[In-content Ad]]