City Hotel Costing Taxpayers
Updated: Friday, August 2 2013, 10:22 PM EDT
A questionable hotel that the city spent hundreds of millions of dollars to build is causing more problems for taxpayers.
The city got into the hotel business five years ago when it used $300 million in city backed bonds to pay for the Hilton. And even though the convention center hotel opened during the height of the recession, city developers repeatedly assured taxpayers that it was on sound financial ground.
But it appears the financial forecast was far gloomier than anyone wanted to discuss.
At City Hall Thursday morning, city finance officials admitted they are digging into the general fund and using revenue from hotel occupancy taxes just to make the bond payments on the hotel - and they don't expect that to change anytime soon.
The bleak forecast prompted City Councilman Carl Stokes to demand the city to take a hard look at getting out of the hotel business.
"I want us to try to work it out so we don't have a fire sale. I don't want a fire sale and no one else does either," Stokes said.
City Finance Director Harry Black told the council to expect serious discussion this summer over whether the city should check-out of the hotel business.
City officials would not say if there are any formal plans to sell the hotel or what options the city has to reduce bond payments.