Eminent domain nixed for Hotel of Terror 

Springfield City Council skirted a referendum election with its unanimous decision last night to repeal a declaration of eminent domain to acquire the property where the Hotel of Terror haunted attraction has operated for 45 years. 

Council and owner Sterling Mathis agreed to continue negotiations for the purchase of the building and relocation costs for its movable contents. Prior to voting, Councilmember Brandon Jenson urged both sides to move quickly to avoid running up construction costs with a long delay. 

Under a council measure passed Feb. 21, the building at 334 N. Main Ave. would have been torn down to make way for the Renew Jordan Creek project and the replacement of the Main Street Bridge, as well as the construction and maintenance of other storm and water infrastructure. 

On the agenda for last night’s regular meeting of council were two related measures: one to repeal the Feb. 21 eminent domain declaration and one to call an Aug. 8 election that would ask voters to decide whether to let the eminent domain ordinance stand. That ordinance specified that the property would be condemned. 

Because council repealed the ordinance itself, the election is not necessary, so that item of business was declared to be moot. An election could have cost the city an estimated $250,000, according to City Attorney Rhonda Lewsader. 

Mathis collected enough petition signatures – more than the 1,568 required – to place a referendum on the ballot.

“I didn’t ask for any of this,” Mathis said during an address to council. “We’re here because the city is trying to take my property for way less than it’s going to cost to move or rebuild somewhere else.” 

Mathis outlined his case to council, noting the city began its negotiation with a $200,000 offer four years ago, in line with an appraisal of the attraction as a vacant building, not a turnkey haunted house that has been in seasonal operation for 45 years. He noted 15,000 visitors visited the attraction in October 2022. 

Mathis said a moving company brought on as a consultant by the city told him the majority of the features he has built into the attraction over the years cannot be moved. 

“I’m not opposed to moving. I’m opposed to going bankrupt,” Mathis said. 

He added that a construction company has told him recreating the Hotel of Terror in another location would cost $1.5 million to $2 million. Mathis owns another location, the Dungeons of Doom, a haunted attraction built into a massive grain elevator blocks away from the Hotel of Terror at 701 W. Wall St., but it needs a roof replacement, removal of metal silos, installation of sprinklers and other work, priced at half a million dollars, before a now-closed area can be opened to visitors as a new Hotel of Terror. 

He added that a builder the city brought to meet with him believes he can do design work for $130,000-$150,000, but Mathis needs more time to work it out. 

“It’s up to you guys to give me the time,” he said. 

Councilmember Matthew Simpson noted there are two payments to be considered: fair market value for the purchase of the property and expenses for relocation. 

“You know, I think that the best outcome in these situations is always a fair market value reached through negotiations,” he said. “In this case, there’s a willingness to negotiate, so it’s just a matter of determining what is that fair market value.” 

Jenson pointed out that inflation is elevating the estimated cost of the project each month. City Manager Jason Gage said while inflation is coming down, it is not clear if the cost of construction projects will too, since there are a lot of federal dollars in the economy for construction. 

“I would just respectfully request that if this ordinance is repealed that both the city and Mr. Mathis were to act as expediently as possible to minimize the cost overruns that are going to be experienced on this project as a result of this delay,” Jenson said. 

Councilmember Craig Hosmer said he would rather have $250,000 spent toward getting the issue resolved than paying to have an election.