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 received its first reading before Springfield City Council last night.
Though several members expressed their concerns about buying back the land valued at roughly $1 million while John Q. Hammons’ management company is still under contract to manage 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.
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 for JQH Arena and decided to keep 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. Secondly, he would allow a former Hammons Tower tenant, accounting firm BKD LLP, to build its headquarters on his University Plaza Hotel parking lot. Thirdly, 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 this month.
Following the Hunden report, Hammons officials indicated that 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.
During the City Council meeting, councilman Thomas Bieker said he worried that because Hammons’ company is under a 25-year contract to manage the Expo Center, the city would have a difficult time securing a development partner that would be willing to connect to the facility and that would be unable to book its own 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.
While other council members also expressed concern, Smith said the city would need to deal with that issue separately because Hammons’ properties are part of a Community Improvement District that funded debt service on the Expo Center, Smith said.
Mayor Jim O’Neal agreed.
“The first step is just to do this. The next step would be to move forward,” he said.
One member of the public, Christopher DiDonato, who indicated he was a member of the Occupy Springfield group, spoke in favor of the city’s transparency on the matter and the land repurchase, stating he hoped a hotel development on the tract would produce local jobs.
“I hope that you vote 'yes' and create jobs for this city,” DiDonato said.For more city beat coverage, look to the Dec. 5 Springfield Business Journal print and digital editions.