Jan 12

Jan 12 Respected developer questions use of public funds for hotel proposal

Should the city provide public funding for an underground tunnel connecting a proposed $63 million hotel development with St. Marys Hospital?

That's the question being raised as the developer, Larry Brutger, pushes forward with plans for the 225-room Holiday Inn. Brutger is asking the city for $5.6 million in tax increment financing (TIF) assistance for the project.

Here's a look at where the money would go:

$3 million for a parking ramp that would include public spaces
$1.7 million for the underground tunnel
$900,000 for other project-related costs

To say the proposal has been met with skepticism would be an understatement. Neighborhood advocates, council members and DMC officials have questioned whether it would fair to use public funding for a proposal, in this case the subway connection, that only benefits one entity.

Perhaps the most compelling critique of the project came from Tom Torgerson, CEO of TPI Hospitality, which owns three hotels near the St. Marys Campus.

In a letter addressed to the mayor and members of the council, Torgerson noted that not one of his developments — Marriott SpringHill Suites, Courtyard by Marriott or Homewood Suites by Hilton — required any public financial support.

"I believe the success of our three hotels is a strong testament to the point that public monies are not needed to spur private development along this corridor," said Torgerson.

While he would welcome the continued redevelopment of the corridor, Torgerson said he objects to the idea that public funding should be used to give another private developer a competitive advantage.

"On the other hand, if the City looks to direct public monies towards a neighborhood public use tunnel system that promotes a greater cause than one private business, we would then be in full support of that."

Brutger has maintained that the tunnel could be a catalyst for a full subway system in the Second Street corridor. The council is expected to revisit the proposal at its meeting on Feb. 1.