The City-County Council will consider a funding plan for the $510 million Signia by Hilton hotel June 5.

The 40-story, approximately 800-room luxury hotel is a project in connection with the $200 million expansion of the Indiana Convention Center.

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The city already has approved funding for the $54.3 million purchase of land on Pan Am Plaza for the hotel and $200 million for the convention center expansion.

Underground construction on the project is already underway, and city officials say they are aiming for the hotel to open in 2026.

Here is the funding plan:

More: City of Indianapolis will take over financing for Hilton Signia hotel

• City officials are asking for $625 million in hotel revenue bonds to cover the $510 million construction of the Signia by Hotel hotel.

• Officials say the revenue from the hotel will pay back the debt and also fund reserves.

• The hotel could operate without revenue for a year and a half without needing to dip into the debt reserve funds, officials said.

• The city is pledging a moral obligation to repay the debts from the reserve fund if hotel revenues fall short of what is expected.

• In that case, bond bank officials will ask the City-County Council to appropriate the money that was used so that the reserves are fully funded, though the council has no legal obligation to do so. This move has not been used under the Hogsett administration to date, city officials said.

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Reach business reporter Claire Rafford at 317-617-3402 or crafford@gannett.com. Follow her on Twitter @clairerafford.

This article originally appeared on Indianapolis Star: City announces financing plan for Signia by Hilton hotel