Oct. 30–A financial deal that would have Columbus and Franklin County back a portion of the debt to build second Hilton hotel next to the Greater Columbus Convention Center at an estimated cost of a $180 million won't be done in 2018.
Local officials have been working for months on the deal, which they expected to complete this year. But the Franklin County Convention Facilities Authority is pushing that to January.
"This will not slow us down," said Don Brown, the authority's executive director.
In March, the authority unveiled plans to build the second Hilton across the street from the existing hotel, at 401 N. High Street, and nearly double its capacity to 1,000 rooms. Tourism officials say the city needs a 1,000-room hotel to help lure conventions and other large events to Columbus.
Columbus and Franklin County agreed to work with the authority on the deal in May, but a financial arrangement has remained under negotiation.
After initial discussions about having the city and county split the bond backing, with as much as $95 million secured against tax revenue for both entities, the authority now plans to ask them to collectively back about half of the bonds, Brown said.
The other half of the debt would be secured against future hotel revenue, he said.
Structuring the deal that way will make the hotel more expensive, but Brown said it was a compromise among the agencies working on the deal. Columbus officials were worried that backing the debt for half of the hotel would limit their ability to finance other projects and maintain a AAA bond rating.
"That is the compromise. We're confident and our financial advisers are telling us that it remains affordable, that the project can still pay for itself," he said.
Bonds for the original Hilton, announced in 2009, were backed exclusively by the county, with reserve accounts bankrolled by the authority and the city. Hotel revenue has more than covered that debt, and the reserves have remained untouched.
Brown said he will meet with city and county officials and their financial advisers on Dec. 6 to present the final plan before asking the Columbus City Council and Franklin County Commissioners to approve it in January.
"Our job is to review the proposal that is brought to us and see how we want to move forward," Council President Shannon G. Hardin said. "We have to trust that under the timeline that the convention facilities authority is keeping to, that that timeline works for them."
Delaying the deal will not slow progress on the hotel, expected to open in 2021, because the authority is using the hotel's own cash reserves to pay for design. Bonds likely will be sold next summer, Brown said.
"We are supportive of this project and have remained in communication with our partners as the financing plan is formulated. In my opinion, the slight modification of the project schedule is not a sign of any concerns with the viability of the deal," county administrator Ken Wilson said in a written statement.
Designers showed the authority's development committee a preliminary design this week that includes a multilevel restaurant with large glass windows overlooking Downtown and about 800,000 square feet of total meeting space between the two hotels.
"Assuming we will reach a deal with the city and county, that will allow us to go to the market. The risk is ours, not the city or county's at this point," he said.
rrouan@dispatch.com
@RickRouan
