I received the latest anti-hotel flyer yesterday from the self-named “safer streets, not hotel suites” group. Just like the group’s past “no-hotel” flyers, this one was poorly laid out with headlines running into each other all over the front and the inside layout not much more clear — there was nothing to catch the interest of a voter marginally interested in the deal.
But buried on the back sheet of the tri-fold was some real news: St. Louis’ publicly financed convention center hotel missed its rosy income projections by 41 percent, forcing the hotel into a foreclosure sale earlier this month.
From what I can tell, the St. Louis hotel originally cost $277 million to build six years ago, and it sold at foreclosure for $98 million a few weeks ago. It’s a 1,100-room hotel, managed by Marriott (runner-up to Omni here), and the new owners are considering plans to close a portion of the hotel to make it more affordable to operate. Our hotel is projected to have about 1,000 units and will probably cost somewhere around $300-$350 million to build (the rest of the money will be interest on the debt, along with the much-publicized $50 million fund designed to pay for operating losses Mayor Tom Leppert promises we’ll never see. You can read more about it in the St. Louis Business Journal story by clicking here.
I’m sure there are plenty of differences between what happened in St. Louis and our own project (and I’m sure Leppert will be telling us all about those differences soon). In fact, one of the biggest is that the St. Louis taxpayers weren’t on the hook for the entire deal; I believe they were able to entice a priate developer to put up a large percentage of the money required to build the hotel.
That’s where our deal here is different: We didn’t even try to go that route this time around. The council just decided to build the entire hotel with taxpayer money instead.