City takes 'time out' on land buyback

City officials backed off of the idea of repurchasing a 1.7 acre St. Louis Street parcel from hotelier John Q. Hammons and decided during a June 8 Springfield City Council luncheon to conduct a competitive assessment of the vacant land once deemed suitable for a four-star hotel.

While the city’s $1 purchase option remains on the table, council members approved City Manager Greg Burris’ proposal to delay that action in order to conduct a study of the property between the city-owned Expo Center and Hammons-owned Jordan Valley Car Park.

“In essence, we would take a time out on buying the land back for a dollar,” Burris said. “We would continue what we’re doing now, working behind the scenes toward that, but we would not take the land back until we’ve completed a competitive assessment.”

The city, John Q. Hammons Hotels & Resorts and the Springfield Convention and Visitors Bureau would share the cost of the study, which would be conducted by an outside consulting firm and would look at how Springfield can draw more convention events, the best community use for the lot and ways to improve Expo Center revenues. In the six full years that Hammons Hotels has managed the Expo Center, revenues met budget projections in only two years, according to city financial statements obtained by Springfield Business Journal. Between 2004 and 2009, the center has realized a total net loss of $410,563 before taxes.

Hammons Hotels representatives did not return calls seeking comment.
Burris said a citizen task force would work with the city, CVB and Hammons Hotels officials to make recommendations based on the study’s findings, and he estimated the study would take about five months once a firm is selected.

CVB Director Tracy Kimberlin said it was too soon to estimate a cost for the study.
“This is a customized study, and I really don’t have a clue what it would cost,” he said. The CVB board has yet to approve the city manager’s proposal, though Kimberlin said he expected it would be on the board’s June 17 meeting agenda, noting at this point, members would likely be asked to approve a concept, with a budget revision coming when an estimated cost is determined. He believes members will be receptive to the proposal.

“We’ve not done anything like this recently. As a matter of fact, we haven’t done anything as broadly in scope as what we’re going to do in this situation,” he said. “I think it will give us a lot of very valuable information, in addition to what to do specifically with the lot.”

Council members will have another opportunity to buy back the property when they’re asked to amend the city budget to pay for the city’s portion of the analysis, Burris said. That opportunity could come in August, he said.

‘No-win situation’
Also during the lunch meeting, council members determined the city holds at least some responsibility for a $9 million shortfall in a Police and Fire employee-funded retirement plan. Such employees aren’t eligible to collect Social Security benefits.

The Additional Funding Contribution benefit for Police and Fire employees, adopted in 2000, set aside a percentage of Tier 1 employee salaries for retirement. However, when the city decided to close its Tier 1 benefits plan in 2006, fewer employees could pay into the AFC while Tier 1 retirees still drew from the fund. Actuarial reports show that by 2009 the AFC was facing a shortfall of about $9 million, said Burris, who last week offered council members six funding options to fix the shortcoming. Two options said the city held no responsibility for the shortfall, but council members rejected them both. Within the four remaining options, council members must now determine the severity of closing the Tier 1 plan and commit to funding that portion. The four options also outline ways for employees to pay for their portion of the shortfall.

Council members will hold a public hearing on the AFC options June 14 and expect to vote June 28.

“This is a no-win situation,” Burris said. “If we make everyone mad, we’ve probably honed in on the right solution.”[[In-content Ad]]