07/09/03
By STEVE DOYLE and JOHN PECK
Times Staff Writers steved@htimes.com, johnp@htimes.com
An Embassy Suites hotel apparently will soon grace the skyline of downtown Huntsville.
John Q. Hammons, the wealthy Missouri hotel developer who sued when the City Council reneged on a promise nine years ago to pay for the ground floor of an Embassy Suites in downtown Huntsville, is back for another try.
Mayor Loretta Spencer joined Hammons and other city officials today for the announcement. The deal hinges on council approval.
"I've always had Huntsville on my radar screen,'' Hammons told The Times' editorial board this morning.
He seemed confident the city would honor its commitment this time. "Now I don't see any obstacle unless you all want to create them,'' Hammons quipped, as a smiling mayor and her top administrators looked on.
Hammons, whose hotel empire stretches from Portland, Ore., to Raleigh, N.C., plans to build a 300-room Embassy Suites on city land beside the Von Braun Center's South Hall. Construction on the $40 million high-rise could start by May and would take 15 to 18 months.
Huntsville's "unique blend" of government, high-tech businesses and universities makes it "a natural fit for my hotel development strategy," Hammons said. "Adding this high-end property is a logical next step as the city grows for the future."
City leaders have been trying for more than a decade to recruit a flagship hotel that would put Huntsville in the running for larger conventions. But no one dreamed Hammons, 84, would be the one to finally build it, given the collapse of his first deal with the city in 1994.
That earlier plan called for Hammons to build an Embassy Suites downtown, using nearly $7 million in city tax money and a loan from the Retirement Systems of Alabama. But then-council President Chuck Saunders, who had earlier called Hammons' proposed hotel a "real plus" for the city, changed his mind in the face of intense opposition and cast the deciding vote to kill it.
A month later, voters booted Saunders from his council seat representing southeast Huntsville.
Hammons sued for breach of contract. After a 10-day trial in Decatur in August 1996, a federal jury ordered the city to pay him $547,515 in damages.
Hammons said today that although public financing has helped some of his other hotel endeavors, including the Embassy Suites in Montgomery, the driving issue behind his decisions on where to locate is the market. Huntsville is a clean city with plenty of stable, high-tech companies and a viable convention market, he said.
Councilman Bill Kling, who opposed the first Hammons hotel, said he's inclined to vote "yes" this time.
The difference? The city isn't helping to finance the hotel itself.
"I think it's a reasonable proposal in that it's not giving away the bank," Kling said Tuesday. "We're doing a lot of things we would need to do anyway in terms of infrastructure."
Councilman Glenn Watson, elected after the 1994 hotel dispute, could barely contain his enthusiasm.
"My God, this is all we've ever wanted," he said, "and we're not having to put anything into it. I think the council will support the mayor 100 percent on this."
The council will discuss the hotel at a work session July 17, the mayor said, and could vote on the basic framework of the agreement at its July 24 meeting.
Hammons has tentatively agreed to a deal that calls for the city to build a public parking garage beneath or beside the hotel, spend up to $1 million sprucing up never-finished VBC South Hall meeting rooms, and add a climate-controlled walkway linking the Embassy Suites to the VBC.
Also, the city would lease Hammons the 2.5-acre hotel site on Monroe Street for $1 a year. Meantime, the state Department of Transportation has promised to build a new Memorial Parkway access road near the Embassy Suites, and the U.S. Army Corps of Engineers is ready to spend $7 million widening downtown's Pinhook Creek, which Spencer hopes to turn into a Dixie version of San Antonio's famous Riverwalk.
Hammons said the planned drainage realignment and riverwalk through the hotel site are key incentives that were not part of the failed deal in 1994. He also said the amount of available meeting space in the VBC is another big plus.
"You have to go to a lot of cities to find this much meeting space available,'' he said.
Hammons, who lives in Springfield, Mo., called City Hall in mid-June to express his renewed interest in Huntsville, hours after the city had decided to reject written proposals from eight potential hotel developers.
Hammons said he didn't submit a proposal because he was unaware the city was soliciting development prospects until it was too late. He learned of the bid invitation while attending a regional hotel managers meeting three weeks ago at the Embassy Suites in Montgomery.
Companies that responded to the city's invitation for bids represented some of America's largest hotel chains, including Marriott, Sheraton, Hilton, Hyatt, Omni International and Wyndham. Most were either unwilling to meet the city's size and service requirement or complained the city's $37 million incentives package wasn't generous enough.
Kling said one firm also wanted the city to pay for hotel rooms that went unsold. Another didn't think it should have to pay property taxes.
Hammons accepted the city's incentives package pretty much as is, later negotiating the million-dollar VBC meeting room improvements. Under the current offer, he would finance the $40 million construction tab himself and pay property taxes on the building, which, at nine or 10 floors, would be among the tallest in town. The hotel would employ up to 200 people, Hammons said.
With its multistory atrium, glass elevators and high-speed Internet service in every room, the Embassy Suites is expected to have a $15 million to $20 million annual economic impact on the city.
The hotel would be managed by John Q. Hammons Hotels Inc., a publicly traded company that owns 58 hotels. The stock, which trades on AMEX under the symbol JQH, was trading at $6.05 a share this morning, down 1 cent.
Hammons promised the hotel will be "extremely modern and top of the line'' with standard room rates of $119 to $130. Two Embassy Suites that closely resemble his planned Huntsville hotel are in Bentonville, Ark., and the Nashville suburb of Franklin, Tenn.
