Terre Haute council approves $6.9 million bond for Terminal Hotel after lengthy debate

The Terre Haute City Council on March 6 adopted Special Ordinance 02/2025, authorizing a $6,900,000 economic development revenue bond for Terminal Hotel Partners LLC to advance a downtown hotel project. The bond measure passed by roll call vote, 9-0.

The ordinance authorizes issuance of short-term bonds that redevelopment officials expect will be paid immediately or within days; bond counsel and the developer said the $6.9 million figure includes the $6.7 million in incentive funding pledged by the redevelopment commission plus costs tied to issuing the bonds. Dustin Meeks, bond counsel with Barnes & Thornburg, told the council the economic project and loan agreement recognizes that the redevelopment commission needs the council’s approval to act, but that the council itself is not a direct contracting party to that agreement.

The question of process dominated discussion. Several council members said they had not received key contract documents until the day of the meeting and pressed for more transparency and time to consult the council attorney. Councilperson Thompson said the timing put the council “in a position” where she felt compelled to vote for the project but warned: “Do not put city council in this position ever again. Be transparent. Be honest.” Other council members echoed frustration about late delivery of loan documents and attachments and requested clearer notice from the redevelopment commission in future matters.

Eddie Felling of Linden Felling Law Firm, representing Terminal Hotel Partners, said the project already had committed public funding and that the TIF cash was on hand. He explained the $6.7 million is the amount Terminal Hotel Partners could receive under the purchase and sale contract and that the $6.9 million bond amount includes issuance and administrative costs required by state statute. Felling said the structure is essentially a short-term passthrough: the bank would advance funds and the bonds would likely be paid off almost immediately.

Council members sought legal clarity about whether redevelopment could be sued if the council failed to approve the bond ordinance. Felling said redevelopment could face breach-of-contract claims; Meeks confirmed the loan agreement’s language is intended to reflect that redevelopment’s performance depends on the council’s approval of a bond issuance. Councilmember Dinkel and others stressed the redevelopment commission negotiates separately from the council and said they expect clearer communication from redevelopment going forward.

Several members quantified the public contribution to the project during the debate: council discussion listed $3,000,000 from ARPA, $6,700,000 in redevelopment/TIF commitments, $4,171,000 in REDI grant funds and other in-kind contributions such as city-owned property conveyed for $1 and demolition paid by the city. Developers and administration representatives said there were no further requests to the council anticipated at this time.

Councilman Chalos moved to adopt Special Ordinance 02/2025; Councilman Azar seconded. A subsidiary motion to table the ordinance was made earlier in the discussion but was withdrawn. A roll call vote followed and the ordinance passed 9-0. The council record shows the action as: adopt Special Ordinance 02/2025 authorizing issuance of economic development revenue bonds for Terminal Hotel Partners LLC — outcome: approved.

The developer team present said the project remains on schedule and that the bond step is a statutory formality necessary to enable the pledged TIF payment to flow. Bond counsel said the form economic project and loan agreement and trust indenture would be executed following the council’s approval of the bond ordinance.