Conference center proposals rejected
City Council's 9-1 vote kills both Ehrhardt, Farmer proposals
Tuesday, April 8, 2014
The Jefferson City Council voted to reject both conference center proposals Monday night, effectively putting an end to a nearly two-year process.
The council voted 9-1 to reject both proposals, with 4th Ward Councilwoman Carrie Tergin casting the sole no vote.
The vote followed a failed attempt to move the proposal from Ehrhardt Hositality Group forward to pre-development agreement negotiations. The resolution, sponsored by 2nd Ward Councilman J. Rick Mihalevich, failed by a 6-4 vote, with Mihalevich, Tergin, 1st Ward Councilman Rick Prather and 1st Ward Councilman Jim Branch voting in favor of the resolution.
Council members have been working for nearly two years on the current incarnation of a proposed conference center. The past few months have been spent in closed sessions with two developers, negotiating details and ironing out what incentives would be needed to make the project work.
The proposal from Jefferson City-based Farmer Holding Co. included a 61,000-square-foot conference center to be located within the Capital Mall, with a 127-room hotel attached and a total conference center cost of roughly $14 million. The hotel itself would have cost just under $14 million.
The proposal from Hannibal-based Ehrhardt Hospitality Group included a nearly 45,000-square-foot conference center in the 300 block of West McCarty Street, with a 150-room hotel attached. The conference center would have cost $13.8 million and the hotel itself would have cost $15 million.
In discussions before the vote, several council members specified they are not against a conference center, but simply do not support the proposals before the city now.
“I don’t think this process … should be this difficult,” said 5th Ward Councilman Ralph Bray. “If this project was meant to be, it would not be this difficult … it’s taken too long … it’s been too disappointing.”
Bray said the requested incentives from both developers, which he referred to as “subsidies,” are too much from the public. Referencing the additional taxes that would be levied through use of a tax increment financing district, community improvement districts and a transportation development district, Bray said “I don’t have the stomach for all these new taxes right now.”
Third Ward Councilman Ken Hussey said five months after the 6-4 vote to move both proposals forward, the council is still deaing with unanswered questions.
“To me, not much has changed since November,” Hussey said. “We can’t afford what we think we may want.”
Fifth Ward Councilman Larry Henry said the council has told residents that proposals were “best and final offers,” yet they were continuing to discuss changes and further negotiations, something he said was not right.
“Are we lying to the public at this point,” Henry asked. “We can’t afford this right now. We simply can’t.”
Third Ward Councilman Bob Scrivner, who noted he believed the Farmers’ proposal was the better of the two, said he was afraid the council had gotten lost in the debate about which location was best and lost sight of the consideration about how much the project would cost the city.
“I’m not for a conference center at any cost,” Scrivner said. “I’m for a conference center that makes economic sense.”
Tergin and Mihalevich both urged the council to move forward with the Ehrhardt Group, noting the resolution included a provision that the pre-development agreement stage would last no more than six months and if, at that point, there were still issues and unanswered questions, the council could still walk away.
Fourth Ward Councilman Carlos Graham questioned whether a pre-development agreement really could be done in six months.
Second Ward Councilman Shawn Schulte, who also noted he still supported the Farmers’ proposal, said the requested incentives from the developers were not feasible and Jefferson City residents were clear about the project needing to be funded solely from the lodging tax.
“The time to walk away is now,” Schulte said.
Mayor Eric Struemph urged the council to move forward with the Ehrhardt proposal, though he noted he originally supported the Farmers’ proposal. Struemph said a six-month period would not be too much to ask to see if the Ehrhardt proposal could work.
“Right now, I’m all in,” Struemph said.
After the vote rejecting both proposals, Struemph said he is looking forward to hearing from constituents about how the council should proceed.
“It has to be a discussion in the community,” Struemph said. “It’s far from over.”
Joe Bednar, an attorney representing the Ehrhardt Hospitality Group, said they felt they responded to the council’s questions and to the original request for proposals.
“Obviously we’re extremely disappointed,” Bednar said. “In the end, they chose not to be for incentives.”
Bednar said he could not speak for the Ehrhardt Group on whether the company would be willing to bid on the project again if the council puts out a new request for proposals.
Representatives of Farmer Holding Co. could not be reached for comment.
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