HCW Evergreen withdraws from hotel competition

Rick Huffman, CEO of HCW Evergreen LLC, sent a letter to City Manager Bob Cumley in mid-September that outlined the Branson firm’s decision to withdraw from the field of developers interested in building on 1.7 acres between the Springfield Expo Center and Jordan Valley Car Park.

“We read the lease on the (Springfield Expo Center) … and based upon how that lease was structured with Mr. (John Q.) Hammons, I think it makes it very difficult for us to make a hotel and new ballroom work and connect to the (Expo Center),” Huffman said. “We had real second thoughts when you read that lease and see that Hammons pretty much has control. ... We just don’t want to play the game.”

City spokeswoman Louise Whall said the city was sorry to see HCW Evergreen withdraw its proposal. A proposed term sheet with the developer recommended by city staff for the convention center/hotel project could go before City Council as early as Oct. 8, Whall said.

In July, the Springfield Tax Abatement and Tax Increment Financing Commission forwarded four development proposals to city officials for further negotiations. HCW Evergreen, BC Development Co. of Kansas City and John Q. Hammons Hotels & Resorts LLC each submitted hotel-office tower proposals while Opus Northwest LLC, also of Kansas City, pitched a headquarters building for accounting firm BKD LLP and a “pad” for a future hotel.

The three firms proposing hotel-office towers later agreed to split the two components into separate buildings on the former arena site.

The property was once slated for a multipurpose arena backed by Hammons, who later withdrew the plan and partnered with Missouri State University to build the $67 million JQH Arena on the school’s campus.

Hammons Hotels is apparently the only one of those three firms still actively negotiating with the city. City officials say they’ve lost contact with BC Development, whose chief principal, Rick Baier, could not be reached for comment.

“We take silence as they’re out,” said City Attorney Dan Wichmer. “We asked for information and didn’t get it. I think they just looked at the same thing Huffman did, and they said, ‘We’re not going to bother to respond.’”

Upper hand

Wichmer acknowledged that the Expo Center lease with Hammons – and his ownership of several surrounding properties – gave the hotelier an upper hand against his competitors, primarily because he controls the facility’s food and beverage sales.

“There were a lot of things that added up for pluses for him in terms of him structuring a deal,” Wichmer said. “When you go into a race, and somebody’s got a 50-yard head start in a 100-yard race, it’s tough to make up the gap.”

Earlier this year, questions surfaced about a 90-foot easement east of the Expo Center and whether Hammons or the city controlled the strip, which would need to be bridged to connect the facility to a new hotel. Wichmer opined that the city controlled the property, which he said fell outside the purview of the lease terms. His stance hasn’t changed.

“In my opinion, the more important factor (for Huffman’s withdrawal) was Hammons has exclusive operating rights,” Wichmer said. “And on most of these deals, my experience has been that if you have exclusive rights to food and beverage service, you pretty much have locked up the ability of anybody else coming and making any money off of that convention center.”

Separate negotiations with BKD?

Huffman said city officials didn’t want HCW Evergreen to withdraw its proposal, but the firm’s attorneys agreed that obstacles stemming from the Expo Center lease were too great.

“We just think it’s best to move on down the road. We’ve got other places that want us to develop,” Huffman said, pointing to a proposed $500 million mixed-use riverbank development in Tulsa, Okla., and two hotels near Phoenix.

Huffman said city officials also indicated to him that BKD has been negotiating separately with Opus Northwest to build its new headquarters building on a Hammons-owned parking lot not far from the former arena site.

City officials declined to comment

about off-site plans involving BKD, and Hammons representative Mark Harrell, president of Plaza Realty & Manage-

ment Services Inc., referred questions to Hammons corporate counsel, Debra Shantz, who did not immediately return a call.

“I can’t confirm that,” Harrell said. “It hasn’t been formally announced that it’s going to transpire.”

BKD has been in Hammons Tower since 1987, and its 260-plus employees now occupy nearly a third of the 22-story building just east of the former arena site. For more than two years, the firm has been working with Kansas City-based Zimmer Real Estate Services LLC to find land for a new corporate headquarters, preferably in the downtown area. [[In-content Ad]]