The Port Agrees To Issue Bonds To Buy, Demolish Former Millennium Hotel
The Port of Greater Cincinnati Development Authority Board voted Wednesday to issue up to $59 million in revenue bonds to acquire and demolish the former Millennium Hotel in Downtown Cincinnati.
Acquiring the property will cost $36 million, and officials believe another $12 million will be needed for demolition.
The Port is working on getting the financing completed in anticipation of the transaction closing on Feb. 14.
Prior to that closing, Cincinnati City Council and the Hamilton County Convention Facilities Authority (CFA) must also agree to the deal.
The CFA must sign off because The Port's bonds will be guaranteed with residual funds from the county portion of the Transient Occupancy Tax (hotel/motel tax). That group is scheduled to meet on Jan. 24.
Much of the funding from that tax covers bond payments used to expand the Duke Energy Convention Center. Any leftover money has been used to fund tourism activities and expansion work at the Sharonville Convention Center.
County officials believe there's enough residual money to continue those activities, and use it to cover the acquisition and demolition of the Millennium.
City council must approve a cooperative agreement since it levies a similar tax in conjunction with the county. It recently used residual money from its portion of the tax to assist with infrastructure work associated with the new FC Cincinnati stadium in the West End. The county commission had to approve a similar cooperative agreement for that spending.
Port President and CEO Laura Brunner said Wednesday there are "a lot of moving parts," and officials are "laser focused" on Feb. 14.
Brunner said officials are still studying whether the Millennium site will be used for a new standalone hotel, expanding the Duke Center, or a combination of center expansion and a new hotel. The size for a new hotel ranges from 600 to 1,000 rooms.
She said officials will be traveling to Columbus and Cleveland next week to evaluate convention centers and nearby hotels in those cities.
In addition, Hilton representative will be in Cincinnati Friday to meet with officials. Hilton has been mentioned as a brand for a new hotel to serve the convention center.
Brunner said a group consisting of Mayor John Cranley, city administrators, county commissioners and administrators, and representative from The Port, the Cincinnati Business Committee, 3CDC, and the Convention and Visitors Bureau will likely make the final decision on the Millennium site.
Brunner said that group will decide what, how soon and how such a project is financed. She said demolition will take at least a year to complete.
The Port's goal, if a new hotel is built, is for the facility to generate enough revenue to pay for its construction and operation. But those financial studies are still to be conducted.
Local leaders have said for years the city is losing out on convention business because of the poor conditions at the Millennium Hotel. They say a new hotel will help the city sell more conventions and benefit other hotels and businesses in the downtown area.
Mayor Cranley even publicly discouraged people from staying there.
A break came last summer, when a local developer, Vandercar, LLC, reached an agreement with the Millennium's owner to buy the property for $36 million.
Vandercar's purchase agreement included language, which allowed it to assign the contract to a public entity.
Vandercar, The Port, and Hamilton County reached agreement in September for the Port to take that assignment.
The Millennium Hotel closed on New Year's Eve in anticipation of the upcoming sale.