Our Opinion: Withdrawal of proposal marks another setback
Wednesday, June 5, 2013
The perpetual roller-coaster that is Jefferson City’s quest for a conference center has experienced another plunge.
The occasion is the announced withdrawal by one of three bidders who responded to the city’s latest invitation.
The city revealed Tuesday that Drury Development Company, in a May 31 letter, withdrew its proposal to locate a conference center at the West McCarty Street site, the Missouri State Penitentiary redevelopment site or any other site that meets city requirements.
The announcement marks a valley between two peaks.
One occurred earlier this year when the city received three proposals in response to its request. Another is anticipated Thursday when the public receives is first opportunity to hear the developers offer more details about their plans.
Among the remaining developers:
• Ehrhardt Hospitality Group, based in Hannibal, proposes a facility at the West McCarty Street site.
• Farmer Holding Company, a local developer, proposes a facility at Capital Mall, which it acquired earlier this year.
A question expected to arise at, if not dominate, Thursday’s session will pertain to ongoing operationing costs.
The city has proposed to commit up to $9 million — from increased lodging tax revenues — to build the facility.
In its withdrawal letter, Drury questioned whether a private developer could operate profitably without additional public support.
Larry W. Hasselfeld, senior vice president for Drury, wrote: “The ongoing operating cost and future renovation cost of the center is likely to exceed operating revenues generated by the center. Public ownership or support may be necessary for an ongoing successful operation.”
Do city officials and/or the remaining developers share this concern? If not, why not?
A lot of money — both private investment and public tax dollars — is at stake, as is, potentially, the city’s bond rating.
A venture of this magnitude cannot be free of risk.
But city officials have an obligation to taxpayers to practice prudence in the face of risk.
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