Ehrhardt conference center numbers show $15.5M investment

Lodging tax funds would make up remainder of cost

At the request of the Jefferson City Council, the Ehrhardt Hospitality Group has provided some more specific numbers for its conference center proposal.

In an email sent late Tuesday afternoon that was obtained by the News Tribune on Wednesday, interim City Administrator Drew Hilpert told council members the Ehrhardt Group intends to construct a $15.5 million hotel “completely on their own financing, no city funds needed.” The conference center portion of the project then would be funded entirely from the city’s lodging tax funds, which is estimated to provide $9 million.

“The Ehrhardts are willing to build as large a conference center as can be paid for out of the 4 percent lodging tax and/or the economic incentives authorized by the city,” Hilpert wrote in the email to council members.

Last week, the council voted unanimously to direct Hilpert to get specific numbers from the Ehrhardts by Tuesday. The needed information included the total cost of the project, how much the developer will invest in the project, the funding gap for the project and what incentives the developer is requesting to fill that gap.

The funding gap is the difference between the total price tag on a proposal and the city’s $9 million contribution.

In mid-November, the City Council voted 6-4 to move conference center proposals from both Jefferson City-based Farmer Holding Co. and Hannibal-based Ehrhardt Hospitality Group forward into the contract negotiation phase. There is no timeline for completing the next phase, with Hilpert saying it could take from two months to two years before contracts are ready to be presented.

Farmer Holding Co. has proposed a $36 million hotel and conference center at the Capital Mall, while Ehrhardt Hospitality has proposed a $24.6 million hotel and conference center at the West McCarty Street site, which is owned by the state.

The Ehrhardt Groups’ total cost does not include an estimated $2 million for land acquisition, which is expected to be paid by the city, or an estimated $7 million for a city built and operated parking garage.

The funding gap for Farmer Holding Co. is $27 million, which the developer has proposed closing by using $11.4 million in private investments, $10.6 million in tax increment financing funds and roughly $5 million in sales tax proceeds from a community improvement district.

Hilpert’s email notes the Ehrhardts expect the lodging tax will raise more than the $9 million for conference center construction “because they expect more people to come to Jefferson City as a result of the conference center (the reason for the whole project). Thus once we get into deeper negotiations both sides will have some economic experts give us further analysis of this figure.”

The email also notes the Ehrhardts “are flexible on the incentives,” but are looking at some combination of a local tax increment financing district, community improvement district and transportation development district.

Hilpert states the district likely would include portions of downtown, but “exactly what size is needed will vary based upon how much the city wants in terms of square foot dollars in the conference center and what we need to make a parking garage feasible.”

Farmer Holding Co. also has requested a tax increment financing district and community improvement district as part of their conference center proposal.

Hilpert noted the economic incentives and any additional money raised by the lodging tax would be used to improve the conference center facility.

Scott Ehrhardt did not return multiple calls for comment.

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