Hotel Elkhart project moves forward
ELKHART — City officials have approved an additional loan of $600,000 to the Hotel Elkhart renovation. The city had previously given the developers a $1.95 million loan.
“Headwinds in the construction industry” were why developers needed the additional funds, according to Ed Bradley, senior vice president at Newman Grubb Cressy & Everett, with a high number of projects making the environment more competitive.
He also mentioned some of the problems that have developed at the building, including a broken water pipe, which affected the old elevators that now have to be replaced. That was also the end of reliable water service, forcing the last remaining residents to move out.
“The elevators ... they have been slow, rickety for years,” council member Richard Shively, a Republican from the 1st District, said at Monday’s City Council meeting. “I guess I’m surprised this has now become an additional problem requiring more money.”
Despite the extra loan, the city is taking a proportionally smaller financial role in the redevelopment project, as other investors have contributed even more.
According to presentations given to the Elkhart City Council and the redevelopment and economic development commissions Monday and Tuesday, the total cost of the project is around $15 million. The developers estimate that the city will receive around $7 million in various kinds of revenue related to the hotel in the first 20 years of its operation.
According to Bradley, the renovated Hotel Elkhart will be the only boutique hotel between Indianapolis and Grand Rapids, Michigan. It is expected to permanently employ 60 people, who will work for a third-party hospitality manager, who has yet to be found.
“We are trying to find the right fit because of the property and its uniqueness,” Bradley said.
The restoration of the hotel includes getting the ballroom on a top floor of the hotel up to date, offering a venue with a great view of Elkhart, Bradley said.
Council member Brent Curry, District 5, said he remember how Hotel Elkhart was “the place to be” when he was growing up and asked if it can become that again and, for instance, bring in guests for Notre Dame game weekends.
“It’s going to be,” Bradley said. “Absolutely. That is part of our goal.”
The city redevelopment and economic development commissions voted unanimously to provide the loan. The City Council passed the ordinance 6-1 with 4th District council member Fish voting against and at-large Council President Brian Dickerson abstaining.
The first loan was approved in October 2017. The developer expected the total cost of the project to be $10 million to $12 million.
The hotel on 500 S. Main St. should open in March 2020, officials said.