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Lawsuits Loom From Both Sides On Kansas City Convention Hotel Ballot Measure

Hyatt Hotels

Faced with the prospect of a lawsuit from petitioners if a referendum on a new downtown hotel does not go on the ballot, Kansas City council members worry that more costly lawsuits could result if they honor the 1,700 petition signatures filed. 

The outgoing city council approved the deal on the $311 million, 800-room hotel in July.  The deal involves $164 million in city participation, but the commitment does not add to the city's debt load, and City Manager Troy Schulte says all city cash obligations would come from tourism taxes, not from the general fund.

Current Council Planning, Zoning and Economic Development chair Scott Taylor says contracts with the hotel developers were promptly signed with a timetable setting 2018 as to opening date for the hotel. 

Taylor says a public vote to void the binding contracts invites lawsuits by the developers.

“That would be a possibility.” Taylor commented.  “Any time you have a breach of contract it can be a pretty significant thing.  And than obviously you have a negative impact for taxpayers.”

Taylor says there could also be issues with some organizations that have signed agreements to hold large conventions here in 2019 based on the expectation that the new hotel would be open. 

At last week's closed-door council discussion on the legalities tempers flared and shouting was heard. 

Taylor says even council members who support not submitting the measure to the voters do not want to display a lack of respect for those who signed the petitions or for the initiative and referendum processes. 

But, he says, whatever decision the council reaches within the 60-day allowable time period must place heavy weight on what is good for all the city's taxpayers.

He says there will be more information gathering before their next discussion on whether to put the measure on the ballot.

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