University Daily Kansan
Friday, September 7, 1978
13
Motel owners against Holidome bonds
By ANN LANGENFELD Staff Reporter
A number of motel operators in Lawrence do not agree with the city's decision to issue industrial revenue bonds to a firm planning to build a 200-room motel-concentration center in Lawrence, according to random interviews this week.
The city commissioners last week agreed to sell the million in industrial revenue bonds to a state-owned bank, which plans to build a Holiday south of Second Street and on the east side of Third Street.
Industrial revenue bonds are a method used by cities to encourage industrial growth. These bonds are based on the city's property tax base, allow a firm to obtain less expensive financing, and provide a creditor with a financial asset.
Topeka Inn Management officials said they would not take the property tax exemption.
Pete Peterson, manager of the Hallmark Inn, 750 Iowa, said he was against the issuance of the bonds. He said the city was in favor of the bond, paid by motor operators already in the city.
IF THE NEW convention center takes away our business, the city will not get as many taxes from us because our business will be decreased," he said.
"If the management firm had to put up their own money, the Holdome wouldn't be built."
Bob Brock, president of Topeka Inn Management, said the center could not be built without the revenue bonds.
Inesa Ileba, manager of Westminster Inn, 232 W. Sixth, said issuing the revenue bonds was the most objectionable feature of the Holidome.
She also said the location of the facility should be closer to downtown. Conventions are supposed to generate revenue, she said, and they will probably be encouraged conventioners to go downtown.
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He said most of the conventions he expected to be held at the facility would involve Kansas businesses and associations.
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The developers have said there would be a shuttle bus service from the Holidome to downtown.
Phaby said the Hutchinson Holdemine company has issued a letter, However, the city has written a letter intent to issue $7 million in industrial revenue and an expansion of the town's enterprise in the next year.
Brock said, "I think Lawrence model operators are running scared. I can predict within a year after opening the Holidone the vlll make all a lot of money."
P敌 Pciewiciess, manager of the Virginia Inn, 297 W. Sixth, said, "It's going up for sure, but I think it will hurt us (other models) in the long run. What I want to know is that only commission will issue revenge bonds to buy our mortgages if we go out of business.
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Amelia Lee, who owns the El Navajo center probably would be good for the city, but she thought the motel might take away business from other Lawrence motel
"MANY OF OUROWN members have mixed reactions to the Holden," he said. "Only in two or three years will we know it is going to be beneficial as the developers will it be."
He said current interest rates were too high for Topeka Inn Management to consider private financing.
"The Lawrence Holiday will have an enviable position," Philey said, "because they will get many meetings from the University connected with the University of Kansas."
THE HUTCHINSON Holidome has 150 rooms. Hutchinson has 16 motels with a total of 870 rooms.
POCIEJEWSKI also said he did not think the city could support a 900-room facility, but he thought a convention center would be good for the city.
Brock said a Holdome similar to the one planned for Lawrence was operating successfully in Hutchinson.
Glenn West, executive vice president of the Lawrence Chamber of Commerce, said the chamber's board had not taken a position on the issue.
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Brock added, "We think we know Lawrence pretty well. The potential is there for a convention center."
Sales director of the Hutchinson Holdome, Fred Phaye, said that the facility averaged two conventions a week with an average attendance of 175 to 200 attendees.
Each delegate spends about $50 a day in the city,he said.
Iowa, who spoke against the Holdeme at last week's commission meeting, said he had taken a walk-and-see attitude.
"If they can generate enough business for themselves, it will be all right." he said.
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John Daweline, executive vice president of the John Daveline company, the community's attitude about the Holiday was favorable. He said there had not been any controversy from other motel companies.
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