Downtown hotel, conference center loses developer again

Oct. 24—The downtown hotel and conference center has lost its developer yet again.

Dora Hotel Company has backed away from building a Hilton hotel in downtown Kokomo, officials announced Tuesday morning during the monthly Howard County Conventions, Visitors and Tourism Commission meeting.

In an interview with the Tribune, Tim Dora said rising borrowing rates due to the U.S. Federal Reserve hiking interest rates and increased construction and labor costs due to inflation has made the project financially untenable for the company, at least at the moment.

A development plan for both the hotel and conference center was approved in January. Progress stalled, though, as construction bids for the hotel began being received throughout this year. Dora told the Tribune in December that he was "committed" to the project and that only high interest rates and increasing costs could potentially delay the project.

"We're a victim of the circumstances," Dora said, adding that the cost to build the hotel has risen at least by 50% since 2018. "I'm still inclined to believe we're going to have a recession coming. I think interest rates should come back down eventually and hopefully with a recession, construction costs should lighten up. Then it would be doable, but right now we can't."

Dora also suggested that in less than favorable times for borrowing, projects like the downtown hotel in small to medium sized cities are negatively affected the most as expected revenue is not as high to help offset higher costs.

"I love trying to revitalize some of the smaller communities in the state, but the problem is what it costs to build something in downtown Indy is exactly the same amount to build it in Kokomo, Terre Haute and Columbus," he said. "In downtown Indy we get a lot more revenue. That's the issue."

When asked why the downtown hotel has had a difficult time being built when a handful of other hotels are currently being built in other parts of the city, Dora said the downtown hotel he and the city envisions is more expensive than the average hotel development.

"I don't want to build a crappy, little roadside hotel downtown," Dora said. "This thing has to last 50-60 years so we have to build quality, not some piece of junk wood construction where Hilton is not going to want to renew in 20 years ..."

Dora said he still believes in the project, but decided to step away from it to allow the city the ability to land another developer who may be able to get the project done in a more timely manner.

Part of the rush to get the project complete as quickly as possible is the millions of READI grant dollars set to help pay for the construction of the hotel. Funded with American Rescue Plan money, use of READI money must follow ARP guidelines, including having to be formally obligated by the end of 2024 and spent by the end of 2026.

"I don't want to stand in their way," Dora said of the city's desire to complete the project as quickly as possible. "If I'm wrong, which there's a distinct possibility that I'm wrong, and someone else can get it done, then that's what's in the best interest of the city. But if they don't, I've told all of them 'I'll still be there. I still love this project.'"

The loss of Dora Hotel Company as a developer is yet another setback for the much-talked about and sought after project that city, county and economic development officials say will not only fill a need for travelers to Kokomo but serve as an engine of further growth to Kokomo's downtown.

The project is not dead, though. Lori Dukes, president and CEO of the Greater Kokomo Economic Development Alliance, said a new developer is actively being sought.

"Due to the unprecedented demand for this community asset, the Alliance and CVB (Convention and Visitors Bureau) remain committed to bringing the project to fruition as we actively pursue a new development partner," Dukes said in a statement.

Kokomo Mayor Tyler Moore said the city remains "optimistic" and "firmly believes potential still exists to keep this project viable."

"Like many in our community, the City administration still recognizes the value that a hotel and conference center will bring to Kokomo and to our economic momentum," Moore said in an emailed statement. "Therefore, the City of Kokomo stands committed to help the Alliance and CVB bring this project to fruition."

To hopefully attract a new developer by preventing them from starting the project from scratch, the Howard County Conventions, Visitors and Tourism Commission approved spending nearly $345,000 to purchase the hotel and engineering designs from Dora Hotel Company.

First announced in July 2018, the six-story, 123-room Hilton Garden Inn and the adjoining conference center is to be located in the block between Main and Union streets just north of Wildcat Creek and south of East Superior Street. While the hotel will be owned and operated privately, the two-story conference center will be owned and operated publicly and will offer conference room space and will be the new home for the Kokomo Automotive Museum and the Alliance.

Since it was originally announced, the project has lost its developer four times.

Dora Hotel Company has now backed out of the project twice — the company was the original developer when the project was first announced in July 2018. In the summer of 2019, MWA Kokomo LLC, led by Vincent Dora, president and chief operating officer of Dora Hospitality Group, took over as developer.

Just a few months later, Vincent Dora was out and replaced by Envoy, who developed The Lofts at Union upscale apartments atop a 400-space parking garage.

But Envoy has never developed a hotel, and so it wasn't long that Dora Hotel Company was back attached to the project, being labeled as the "preferred developer" by local officials.

Tyler Juranovich can be reached at 765-454-8577, by email at tyler.juranovich@kokomotribune.com or on Twitter at @tylerjuranovich.