Columbus Ohio Convention Center Hilton Expansion One Step Closer
Columbus City Council and the Franklin County Commissioners announced Monday night that they, along with the Franklin County Convention Facilitates Authority, have created a memorandum of understanding for the $200,000,000 in financing required for the expansion of the Columbus Convention Center Hilton to over 1,000 rooms. This is great news and I think that the clear majority of my fellow Columbus Ohio commercial real estate agents and brokers would agree.
Accommodations have long been a thorn in the side of the Columbus Convention Center’s ability to attract large national conventions and events. Sure, an event planner can likely piece together enough rooms through many hotels to accommodate their attendees, however, I think they much prefer to have available one large facility for everything.
Anyway, back to the subject of financing the proposed 23 story Hilton facility. The project will be paid for with 30-year bonds with a 100% credit enhancement. From there it could materialize in one of two ways.
- 50/50 between city and county so the bonds are backed as AAA rated leased appropriations by city and county.
- 50% credit support from city and county with remainder coming from hotel revenue bonds and bed tax rebates. Doing so would reduce risk for Franklin county and City of Columbus, but come at a capital cost that’s over a million dollars per year higher.
The project would be paid for with 30-year bonds with 100 percent credit enhancement. City and county support would take one of two forms. One scenario is a 50/50 split between the city and county, so the bonds are backed by AAA-rated leased appropriations by the two municipalities, and the revenue from the hotel and convention center become secondary.
An alternative plan would require 50 percent credit support from city and county combined, with the other half coming from hotel revenue bonds and bed tax rebates. This would reduce city and county risk exposure, but come at a higher cost of capital, to the tune of $1.2 million a year, or $35 million over the life of the bonds, Brown said.
But under either plan, he said the project will still pay for itself, it’s just a matter of how much will accumulate in reserves once the balance is paid off.
Assuming that the memorandum is finalized, they will send to underwriters for the bond bids this summer. As we enter a period of quantitative tightening, cost of capital is on the increase so best to get cracking now.
If all goes as planned, the new Hilton expansion would be ready for occupancy by 2021. This will be a boon to everything in the downtown, Arena District and Short North area except for traffic. A healthy Columbus Convention Center will spawn all sorts of increased commercial real estate activity and make Columbus commercial real estate brokers, agents and developers very happy. I watch local Columbus development news carefully so if you’re interested in net lease investment opportunities or a potential retail or office tenant, please give me a call, Scott Harris Realtor, 614-905-6614