City to make second attempt at eminent domain for Hotel of Terror

Springfield City Council heard public comment on its plans to demolish the Hotel of Terror haunted attraction at its meeting last night.

The city’s second attempt to declare eminent domain on the downtown property that has operated as a Halloween attraction for 47 years was first announced in a media briefing Nov. 12.

Declaring the right of eminent domain would allow the city to demolish the property and move forward with the replacement of the deteriorating Main Avenue bridge over Jordan Creek – now described by city officials as a pinch point that restricts the flow of the creek and contributes to downtown flooding.

The city has been working on flood reduction measures downtown for six years, according to Public Works Director Dan Smith. The hotel stands on the western reach of the first phase of the Renew Jordan Creek project, currently underway to provide a public amenity and reduce flooding downtown.

Council previously declared eminent domain in February 2023 in an effort to acquire the property, but the body voted to repeal its own measure three months later after a successful petition effort that demanded a citywide referendum. The repeal skirted the need for a ballot issue to let voters decide whether to allow eminent domain and building condemnation to stand as council and Hotel of Terror owner Sterling Mathis agreed to continue negotiations on a sale price for the property.

Assistant Director of Public Works Brett Foster made the city’s case at last night’s council meeting. He showed photos of damage to the Main Avenue bridge, which has a grade of 2 on a 9-point scale in the National Bridge Inventory. That grade signifies a condition of imminent failure, according to the NBI, and the city has closed it to some traffic, including buses and fire trucks.

Foster said the bridge is in two sections, and the older part probably dates from 1900. Its unique girder system, as Foster described it, was likely fabricated at the time, and he said he has not seen one like it anywhere else.

Photos showed concrete delamination, rebar loss, pack rust and leaching evidence that resembled stalactites. He also showed a structural concern with concrete pulling away from girders.

A proposed replacement bridge would be much longer, eliminating the pinch point restricting water flow, he said. It would have two sections of arches, similar to a bridge over Campbell Avenue. It would have two vehicle lanes, bicycle paths and accessible sidewalks.

Foster estimated widening the bridge would bring a 2- to 3-foot reduction in flood elevation.

Smith said the current bridge is adjacent to the building.

“Since this is a pinch point, we’ve got to lengthen the bridge to allow more water to flow underneath it, to help with these issues of downtown flooding,” he said. “This building is right in the path of where that water needs to be flowing under the bridge.”

Smith said it is not feasible to construct the bridge without significant risk to the building adjacent to it, and it is not feasible to move the structure.

“That pathway for the water really needs to go right through where the building is,” he said. “Hydraulically, it’s not feasible to do this project without taking the building.”

On a slide, Smith shared the history of negotiations between the city and Mathis, showing they began in December 2019 and ran through the city’s February 2023 declaration of eminent domain, rescinded three months later.

After that, there was a back-and-forth with prices and tentative agreements that were never finalized, according to Smith. He described the timeline as follows:

• April 2024: Owner suggests he will sell for $2 million.

• May 2024: City presents owner with contract to purchase for $2 million, but owner does not sign.

• August 2024: Owner suggests he will sell for $2.3 million.

• October 2024: Owner suggests he will sell for $2.7 million

• January and May 2025: City meets with owner and asks for formal counteroffer.

• June: City obtains updated appraisal for $315,000 and shares it with the owner in October.

• August: Owner obtains appraisal for $1.3 million with building valued at $358,000; Smith says he has not shared that appraisal with the city.

• November: Owner offers to sell for $3.5 million.

Hotel of Terror owner Mathis spoke during the public hearing and was given the same three-minute window as the seven other participants.

“That’s a pretty short time for someone’s livelihood, you know?” Mathis said when cut off at the end of his remarks.

But Mathis said the negotiation timeline was not as straightforward as Smith suggested. He recounted difficulty in working with the city’s Building Development Services department.

Mathis said in February 2024, the city was “perfectly fine” with drawings of his plans for moving the contents of the attraction into the another Mathis-owned entertainment property, called Dungeons of Doom, and in May of that year offered the $2 million contract.

He said they were on board.

“We knew what we had to do; we knew how to do it,” he said.

He said he wanted to get started and contacted his builder, since the city’s contract said he had until March 31, 2026, to be gone or face a charge of $100,000.

Mathis said his builder was turned down for permits. A meeting in June 2024 featured all new people from the city, he said.

“We got there – all new people,” he said. “It started very aggressive – told me that we had to change several things; the codes changed, this changed, added a lot of money to this process.”

Mathis said he told city staff that was not what was agreed to.

In May 2024, he said city officials told him a formal proposal was required, and he spent $20,000 to make one and a lot more blueprints. The city did not even look at them, he said.

He said he did get a permit to do a roof at the Dungeons building and demolished its existing roof.

A city official told his architect the roof plans would not work for a haunted house, he said.

“I’ve got $80,000 worth of steel rusting since February, laying on the ground back there,” he said.

Mathis began to talk about flooding at the site when Mayor Jeff Schrag cut him off for time.

Earlier in the meeting, council heard a discussion of historical markers planned for areas of the city. Mathis referenced those comments when he started his own.

“I’ve heard a lot about preserving history here tonight, and, you know, Hotel of Terror, 47 years of history? That’s pretty good, and I want to keep that going,” he said.

Mathis’ family established the haunted attraction in 1978, and the fright features inside of it are handmade. He reported $250,000 in revenue in the season that just ended – a season city officials said in the media event that they were waiting to get through before taking their action on eminent domain.

Mathis said it will cost him $3.5 million to move the contents of the building – a 2023 tour he gave to SBJ showed most of the features are built right into the walls and are customized for the 1904 hotel. The move would be into a site two blocks west, a former rail-side mill Mathis operates as Dungeons of Doom.

Mathis’ attorney is a familiar name to council followers: former Councilmember Kristi Fulnecky, owner of Fulnecky Law LLC.

Speaking before the body last night, Fulnecky criticized city officials for neglecting to name the Hotel of Terror in its presentation about the eminent domain measure.

“I notice that the city did not even mention the name of a business that’s been here for 47 years,” she said. “For 47 years, the Hotel of Terror has been more than just a haunted house; it’s been a rite of passage for generations of Springfield kids, a staple of our downtown economy and one of the longest-running seasonal attractions anywhere in Missouri.”

She said the business has survived recessions, pandemics, changing markets and a transformation of the city, but it is still thriving and driving families downtown.

Fulnecky said the Mathis family is fighting to exist.

“All they’re asking is a right to continue operating the business that they built, or if the city insists on taking their property, to be compensated fairly, fully and honestly under Missouri law,” she said. “This has not happened.”

She added the building had not experienced flooding issues in more than 40 years of ownership.

“These problems didn’t appear suddenly or mysteriously; they began only after the city changed the creek’s topography,” she said.

Like Mathis, Fulnecky said the city’s timeline does not reflect all of the regulations and requirements the city has put on the property.

“At the same time, the city has steadily increased regulatory burdens, permit requirements and code demands that other haunted attractions in this region simply have not faced,” she said. “These shifting and expanding requirements don’t look like safety concerns; they look like pressure – pressure after the city’s first eminent domain attempt was defeated by the people of the city of Springfield.”

The process of eminent domain – defined in state and federal law – was explained by Smith as a court-led one in which a judge appoints an impartial three-person commission to look at facts and data and determine a fair value for the property.

If the compensation determined by the panel seems unfair to either side, Smith said they can appeal and take the matter before a jury to rule on the value.

“It’s a good process, it has an appeal option to it, and it ensures that the final outcome is based on evidence – it’s based on public record and legal oversight, rather than on subjective decisions or private negotiations,” he said. “That’s a powerful thing.”