The city also agreed to share in revenues and losses with the hotel.
I know this got slipped into the story as almost an afterthought but THIS IS A BIG DEAL. To my knowledge this has never been publicly discussed and certainly wasn't part of the memorandum of understanding. Early on, Mark Becker discussed the idea of the hotel sharing profit above certain benchmarks and this was put into the MOA:
11. The Commission and Development Team agree to negotiate, in a final Development Agreement, a provision to give the Commission and/or GWC an economic interest in the Hotel in the event, after the first full five calendar years of the Hotel's operation, the Hotel is then achieving and expected to continue achieving certain minimum threshold investor returns.
I remember discussing this with Mike Sylvester and we both agreed that this was cleverly worded to provide a way for the hotel to mitigate any possible future losses. It was simply not plausible that the hotel would give away profit without the possibility of the city taking on losses. If Lanka's reporting is accurate then the city needs to explain why this was left out of the MOA. I would not be surprised to find out that they deliberately left it out as it certainly would've been a contentious issue.
The next disturbing part of the story covers the idea of a city-subsidized walkway:
The hotel agreement is contingent upon the city constructing an enclosed walkway from the hotel to Grand Wayne Center at the city’s cost. Becker said such a bridge would cost less than $1 million. The skywalk had not been discussed publicly before, and Becker confirmed it will be an additional public subsidy for the project.
This was not in the memorandum of understanding. We're already building them a parking garage, giving them all the land for the project, and giving them $2.5 Million in cash - with another possible cash subsidy 10 years down the road. Why should we kick in an extra $1 Million for the walkway? It certainly can't be argued that the walkway is critical to the business operations of the hotel. Hell, why not subsidize the whole damn thing for them? Is there anything the city and the redevelopment commission would say no to at this point?
Let's not forget that the projected hotel occupancy rates border on President Bush-like delusion. Who in their right mind would use the most optimistic numbers possible when deciding to invest in a project? These occupancy numbers are a perfect example of the city's wanton disregard for our tax dollars...