Hammons asks council to delay hotel construction

At its Sept. 29 meeting, council will hear an amendment to the development agreement that hotelier Hammons and the city signed in May that says construction of a hotel and convention center on St. Louis Street would start no later than 60 days after Hammons buys the land from the city – a sale that must close by Sept. 30. If council approves the amendment, Hammons would not be required to start work until April 2010.

Hammons is paying $7 million for 1.7 acres of land and the neighboring 977-space Jordan Valley Car Park – both of which are city-owned – and he will build a 150-room Embassy Suites hotel and convention center that connects to the Expo Center to the west. While those details of the development agreement remain intact, the city said current market conditions have made construction financing difficult to attain.

“Mr. Hammons requested the extension of the construction commencement date due to the ongoing volatility and constriction of the financial markets, which has negatively affected the availability of bank financing for projects like new convention center hotels,” according to a city news release.

Another bill on the docket for second reading Monday gives the city authority to close on the $7 million sale with Hammons, and it waives an earlier requirement that Hammons also add 80 rooms to his University Plaza Hotel across the street. The sale will eliminate the city’s operational liability for the car park, saving about $500,000 a year, according to the release.

A third bill up for review Monday is a resolution for an Industrial Development Plan for the car park, hotel and project that connects the hotel to the Expo Center. The plan is the first step in providing property tax abatement on the projects, which was spelled out in the initial agreement.