Council adopts TIF allocation resolution for downtown hotel project; bond ordinance introduced but no final action

The Terre Haute City Council on Feb. 6 adopted Resolution 4-20-25, creating a new allocation area for the Terminal Hotel Partners project and clearing a procedural step for redevelopment financing tied to a two-phase downtown hotel development.

City and developer representatives described the overall plan as a two-phase hotel project that will include a 114-room Courtyard by Marriott in phase one and a likely 89–90 room Residence Inn in phase two, built atop a concrete podium with at-grade parking. Developer representatives said that phase one will include two elevated walkways — sky bridges — one crossing Wabash Avenue and another over Seventh Street to connect hotels, parking and nearby facilities, and that incentive dollars are targeted to the podium, parking-garage renovations and the elevated walkways rather than the hotel rooms themselves.

Jason (financial adviser) and attorneys from Barnes & Thornburg described the financing mechanics: the redevelopment commission intends to pledge existing funds and use a bond issuance as the legal mechanism to provide a loan to the developer. Counsel said the redevelopment commission already has funds available and that the bond structure allows those funds to be used in the required legal form. During council questions, staff and the developer said the projected private cost for each hotel portion is about $27,000,000.

Councilors pressed for stronger, enforceable language committing the developer to the second hotel. City counsel and the developer said the project team “reasonably expects” a second hotel but that external factors (convention-center demand, university footprint and market conditions) make a hard contractual commitment impractical at this time. Developers and counsel said they have every intent to proceed and emphasized that the incentives are intended to enable the combined two-phase plan.

Special Ordinance 2-20-25, authorizing issuance of economic development revenue bonds to assist Terminal Hotel Partners, was introduced but the council did not vote to take action on it that night; economic-development bodies must complete additional approvals and exhibits before the council’s final reading. Council members asked for the exhibits that show the “reasonably expect” language and were told those exhibits would be provided before final consideration.

Resolution 4-20-25, which amends the consolidated economic development area plan to create the new allocation area, passed on a council voice vote. The allocation area will have a 25-year life once bonds are issued; officials noted carving two parcels into a new allocation area could capture incremental taxes generated by the hotel project for up to 25 years and thereby extend revenue availability beyond the downtown TIF’s current expiration date.

Attorneys and staff emphasized that the redevelopment commission has committed funds for incentives and that the bond issuance is the mechanism to deploy those funds; officials described that as a largely technical step that will allow the redevelopment commission to issue the incentive loan. Council members said they want exhibits and final financing documents before a final bond vote.