As the Kansas City Council struggles with whether to honor a successful petition drive for a public vote on a planned downtown convention hotel, developers tell the council a delay for the election could be a deal-breaker.
Among the stakeholders in a lengthy Thursday presentation to city council members was Steven Rattner, a finance specialist with the developer of the 800-room hotel. Rattner rold the council that the developer began spending significant time and money on the project in May, after a detailed agreement was signed with the city.
They have planned to finalize financing with Wall Street investors by January at the latest, and break ground soon thereafter.
Any delay, Rattner said, could mean increased costs, such as higher interest, higher hourly wages for labor and higher materials costs.
Rattner underscored that a contract was signed in May.
“On Wall Street and in business,” he told the council, “a contract you sign is a word of your bond. We are trying to live up – and we will live up – to our contractual agreement. What we are asking today is that the city, whom we have been a great partner with and they have been a great partner with us, to continue to live up to their contractual agreement.”
Other presenters reassured new council members that the city had a good deal on the hotel – that other proposals for such a hotel would have cost the city two to three times the amount of cash investment, that should the hotel under-perform the cost would be borne by the developers and operators, and the city's general revenue fund would not be endangered.
The city attorney has said that because a signed contract is in place, the referendum proposition is legally flawed and the council could reject the signed petitions and not place the issue on a ballot.
Debate on that in closed-door legal session led to lost tempers and no decision. Some council members said after that session that they were concerned about possible breach of contract litigation, while others were unwilling to consider rejecting a ballot issue that had a sufficient number of valid petition signatures.
The matter will be discussed again in closed session before any action is taken. But at the conclusion of this week's hearing, some council members seemed very hesitant to consider rejection the referendum petition-drive results.
A representative of the Show-Me Institute, which opposes the city's financial participation in the hotel deal told the council at the end of the meeting that he remained convinced that the developer's desire for tax incentives and other considerations simply proves that there is insufficient market demand for the hotel.
A spokesman for the group that carried out the petition drive told reporters nothing said at the hearing changed his mind or negated the need for a vote on the city’s financial participation.
Steve Bell is afternoon news anchor and business reporter for KCUR. You can reach him at 816-235-5173 or steveb@kcur.org
