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March 5, 2019 Speaker Brian Bosma President Pro Tem Rod Bray

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March 5, 2019 Speaker Brian Bosma President Pro Tem Rod Bray March 5, 2019 Speaker Brian Bosma President Pro Tem Rod Bray Leader Tim Lanane Leader Phil GiaQuinta Gentlemen: It is an exciting time to live and work in downtown Indianapolis. Construction of new residential units is visible from Fountain Square to Mass Avenue. Our streets are teeming with the energy of millennials and retired urban dwellers. Our sports franchises are experiencing consistent success. And our hotel industry is enjoying reasonably good occupancy rates of 72 percent. There is plenty of justification for confidence in the future of the downtown economy. But confidence can easily be distorted by irrationality. Just when the supply of downtown hotel rooms is in appropriate balance with demand, the Indianapolis Capital Improvements Board (CIB) is proposing to subsidize the construction of two new hotels totaling 1,414 rooms. In addition, 1,327 more rooms are slated to open over the next two years, bringing a total of 38 percent more rooms to the already robust 7,180 rooms available to downtown visitors. This is despite absolutely no evidence that demand for hotel rooms will rise to meet the unprecedented increase in supply. In fact, quite the opposite. An independent study recently completed by internationally recognized LW Hospitality Advisors (LW) concludes that if the CIB scheme comes to fruition, occupancy rates at downtown hotels will actually drop 9 percent by 2025, damaging what has been a vibrant hospitality industry and throwing the downtown economy into turmoil. The CIB, and its partner, Visit Indy, are financed largely through tax receipts generated by the hotel industry. The industry has supported every previous increase in hotel room supply, because enough convention center space was added to “induce” larger conventions to come to Indianapolis and thus create demand for the additional rooms. The current CIB proposal relies on $120 million drawn from hotel tax receipts and hotel worker income taxes. But the CIB has refused to include the hotel industry in constructive discussions. Why? It is like giving the CIB money to buy a sledgehammer so they can hit us over the head with it. Why should policymakers and their constituents care about the success or failure of Hoosier hoteliers? Because the hotel industry directly employs thousands of workers downtown alone. Add to that number the restaurant, transportation and entertainment workers supported by our hotel guests, and you have a significant impact on the lives of thousands of central Indiana families. If irrational expansion of the hotel room supply results in a depressed hospitality market (as the independent study suggests), everyone will lose. Hotel, restaurant and transportation employees will be laid off. Tax revenue generated by their income taxes will be lost. Existing hotels will be unable to continue to maintain and improve their hotels, resulting in less desirable hotel rooms for convention and other guests. And the CIB’s scheme, while well intended, will be self-defeating. We have a decades-old tradition in Indianapolis, dating back to the “City Committee” of the 1970s, of inviting all players to the table so that the best minds can produce the best civic result for all Hoosiers. We, the undersigned leaders of the Indianapolis hospitality industry, ask that we be invited back to the table. Until the CIB gets serious about inclusivity in its planning, we must individually, and collectively strongly oppose the CIB’s scheme to irratio- nally flood downtown Indianapolis with new hotel rooms for which there is no projected demand, and therefore oppose Senate Bill 7 in its current form. Sincerely, Bruce White Jim Dora, Jr. Jeffrey J. Good Jeffrey Brown Jeffrey S. Clark Chairman President & CEO President | HRC Hotels LLC CEO | Schahet Hotels Vice President | Host Indianapolis LP White Lodging Services Corporation General Hotels Corporation Owner: Homewood Suites Indianapolis Owner: Hampton Inn Indianapolis/North By it’s general partner host Owner: Marriott Indianapolis Downtown, Owner: Crowne Plaza Airport, Union Downtown, Homewood Suites Indianap- Carmel, Hampton Inn & Suites India- Indianapolis Hotel Member LLC JW Marriott Indianapolis Downtown, Fair- Station Hotel, Homewood Suites Keystone olis Northwest, Homewood Suites Indi- napolis Airport, Hampton Inn & Suites Owner: The Westin Indianapolis field Inn & Suites Indianapolis Downtown at the Crossing anapolis Airport, Fairfield Inn & Suites Indianapolis/Keystone, Hilton Garden Inn Indianapolis, Home2 Suites Indianapolis Indianapolis Airport, Holiday Inn Indianap- Downtown olis Airport, Fairfield Inn & Suites Carmel, Hampton Inn Westfield Joseph Yung Daniel P Hansen Jeremy Welter Mark Schlossberg Michael W. Wells Senior Vice President of Development Chairman, President & CEO Co-President & Chief Operating Officer Authorized Representative President | REI Real Estate Services LLC Columbia Sussex Corporation Summit Hotel Properties Ashford SWVP Indy LLC Owner: Marriott Indianapolis Downtown Owner: Hyatt Regency Indianapolis Owner: SpringHill Suites Indianapolis Owner: Sheraton Hotel Downtown Owner: Hilton Indianapolis Hotel & Suites Downtown, Courtyard Indianapolis Indianapolis Downtown.
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