Topeka Development Corporation authorizes city manager to sign LOI with Endeavor Group for Hotel Topeka sale

Topeka Development Corporation members voted to authorize the city manager, acting as executive director of the TDC, to execute a letter of intent from the Endeavor Group that would transfer Hotel Topeka to the private developer and begin negotiations on a purchase and development agreement.

The action, moved by Director Duncan and seconded by Deputy Mayor Dobler, passed with eight yes votes and one abstention (Director Ortiz). Director Duncan made the motion on the floor and the board took a roll call after discussion. "I will move to allow the city manager to sign this letter of intent and to board with the sale of Hotel Topeka," Duncan said before the second and roll call.

The LOI presented to the board outlines a deal structured to reimburse the city for about $12,200,000 the city has spent on acquisition, operations and temporary note rollovers. Deputy City Manager Braxton Copley described the proposal to members: "The developer is the Endeavor Group." Copley said the developer proposes a $1,000,000 cash purchase price and would permit the city to recoup roughly $11,200,000 through an increment of transient guest tax (TGT) receipts and a Community Improvement District (CID) assessment over multiyear periods — roughly 24 years of TGT increment and about 22 years of CID in the LOI as explained to the board.

Copley said Endeavor expects to flag the property as a Wyndham brand and invest about $6,000,000 in rehabilitation, with the developer estimating another $2,000,000 in working capital to operate the hotel until it stabilizes. He noted the city has supplemented hotel operations with about $1,200,000 last year and is on track for about $1,000,000 this year.

The LOI conditions include a requirement that either the city or Shawnee County issue industrial revenue bonds (IRBs), with an estimated $6,000,000 bond issue to be issued by the municipality but repaid by the developer. Under Kansas law Copley summarized for the board, the IRB package requested would also seek a 10‑year real property tax exemption (about a 92% exemption, as described in the presentation) and a point‑of‑purchase retail sales tax exemption for materials used in the rehab. Copley gave a rough illustration that, on round numbers, a $4,000,000 taxable portion of rehab at roughly 10% retail sales tax would create about $400,000 in tax benefit from the exemption.

Board members pressed for details on scope and revenue. Deputy Mayor Kell reminded the board that these are user taxes: "I just want to remind everyone, those are user taxes." Kell stressed that transient guest tax and CID revenues would be paid by hotel and event users rather than the general public. Board members asked whether the transient guest tax reimbursement would be limited to tax collected from Hotel Topeka guests; Copley replied that the proposal would freeze a baseline equal to the hotel's recent three‑year average TGT receipts and use only the increment above that baseline from Hotel Topeka to reimburse the city.

Several directors praised the proposal as the best available path to shift operating costs off the general fund, attract a national hotel flag and restore conference business in the capital. Director Dovler summarized the public‑private‑county partnership view: "What I really like about this is it creates a 3 way partnership." Director Banks asked staff to permit board members to visit an existing Endeavor property in the region before final approval. Director Ortiz said he would abstain because he arrived late: "I'm gonna abstain because I came in late, so I didn't hear all of the presentation." Director Hiller thanked staff and county colleagues for preserving the complex until private interest emerged.

Copley and staff told the board the LOI is the next step; if authorized the city manager's signature would begin due diligence and formal negotiations on a development agreement that must return to the TDC and that will depend on parallel county agreements for Manor (the conference facility) and long‑term management arrangements. Copley said the LOI also requests that Endeavor be awarded long‑term management rights to market Manor and capture food and beverage sales there; those facilities are currently under contract with a third party through 2028 and will require coordination with Shawnee County.

The board motion authorizes execution of the LOI and directs staff to negotiate purchase and development agreements and advance due diligence. The pair of absent directors was noted at roll call earlier in the meeting; the final tally on the motion was 8 yes, 0 no, 1 abstain (Ortiz), with two members absent from the meeting. The development agreement and any IRB issuance, tax exemptions or CID adoption would require further formal approvals by the appropriate governing bodies before becoming effective.

The meeting adjourned after the vote; staff will return to the TDC with negotiated documents and a proposed development agreement for final consideration.