|By Mike Frazier, Herald & Review,
Decatur, Ill.McClatchy-Tribune Regional News
Oct. 12, 2007 - DECATUR -- The Decatur City Council voted 4-2 Thursday to allow a Forsyth hotel developer to manage the Decatur Conference Center and Hotel.
Steve Horve, president of Horve Hospitality Management Inc., will manage the complex for two years.
Horve also is interested in buying the facility within a year.
Voting for the agreement were Mayor Paul Osborne, council members Betsy Stockard, Patrick Laegeler and Mike McElroy.
Voting against the measure were council members Michael Carrigan and Shad Edwards.
Councilman Dan Caulkins was absent.
Horve said it is very important for the complex to become part of a top hotel franchise.
Horve plans to have several hotel chains look at the property. He also will investigate constructing a water park.
Stockard said she toured other hotels Horve has developed, and she was "very impressed" with the quality of his group's work.
"I'm really excited about this," Stockard said.
Stockard touted Horve's expertise in the hotel field and is hopeful the complex can become part of a big-name hotel franchise.
"If anyone has a chance to get a top name on this hotel, he does," Stockard said of Horve.
The city was under the gun to secure a management firm soon for the hotel.
The city closes its purchase of the hotel on Monday, and the city is prohibited from owning a liquor license.
The council voted 4-3 in August to purchase the financially distressed hotel for $6.5 million, ensuring the hotel would not go on the auction block.
The total cost of the purchase is $7.225 million, including improvements and capital reserves for the complex.
Horve has proposed paying interest only on $7.225 million at 5.6 percent interest. Included in the principal amount are $500,000 for maintenance and major repairs, $125,000 in operating cash and about $100,000 in financing costs.
Horve last week waived the right of first refusal to buy the hotel.
If the hotel is sold to another group while Horve is managing it, any profit greater than the total expense the city incurred in owning the property will be split between the city and Horve.
Edwards and Carrigan voiced concerns over details of the agreement.
Edwards said the city would "gamble away" half of its profits if the hotel sells for a profit, under the deal.
City Manager Steve Garman said the contract was designed to be "as risk-free as possible" for the city.
The agreement also is an incentive for Horve to improve the complex and add value to the property, Garman stated in a memo to council members.
The council took no action Thursday on a last-minute proposal by North Carolina-based Tri-Point Hotels to buy the hotel and construct a water park.
Corporation Counsel Wendy Morthland said bank officials have "no confidence" in the group's ability to perform, and the bank does not endorse assigning the real estate contract to the group "under any circumstances."
Steven Jones, representing Tri-Point Hotels, said he has talked numerous times with bank officials, and the debt on the complex was not serviceable at the price offered.
Jones said constructing a water park is essential for the success of the complex.
"Our No. 1 concern, from the beginning, was to build a water park," Jones said.
Jones said he has secured a lender for the project. Morthland said the city has found "no information" on any lenders.
Mike Frazier can be reached at firstname.lastname@example.org or 421-7985.
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