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Committee briefed on $20.64 million outstanding moral obligation tied to Hyatt convention center project
Summary
Theresa Sedmack told the committee that the city retains a nonbinding moral obligation for the Hyatt convention center and parking facility, with $20.64 million par outstanding after refinancing and an anticipated $1 million subsidy this year.
Theresa Sedmack presented the city’s outstanding moral obligation related to the convention center and parking facility at the Hyatt in Fitzsimmons, describing it as a nonbinding pledge that provides comfort to investors but is subject to appropriation and not legally enforceable.
Sedmack said the original loan would have required a $24,300,000 balloon payment in 2024; the loan was refinanced in 2022 and now carries a $20,640,000 par outstanding that matures in 2039. She told the committee the project is not producing sufficient revenues to cover debt service and that the city expects to subsidize the project by about $1,000,000 this year using AURA funds rather than drawing on the debt service reserve.
“It's just not cash flowing. The projections are not good for the remainder of this year and into next year,” Sedmack said. She added the city has avoided drawing on the debt service reserve in part because doing so could carry credit‑rating implications.
Committee members asked when the council would consider using general fund reserves or other sources. Sedmack said if AURA funds were not available, staff would return to council to request an appropriation and discuss options. The report was provided for information; there was no committee vote recorded.
