Is This Hotel Really Necessary?Richard A. Melcher
The Perot family is in a new real estate dustup--this time over a $124 million, 850-room hotel-and-parking-garage project in Kansas City, Mo. As with their controversial Alliance Airport in Fort Worth, they want heavy public backing for this deal, headed by Ross Perot Jr. Ross Sr. isn't directly involved. Local critics charge the deal is tilted toward the Perots, leaving K.C. burdened with most of the liability if the hotel runs into trouble.
The Perots figure there's a market for a hotel next to the city's convention center, which is being expanded. When they couldn't find outside backers, they turned to the idea of a public-private partnership.
Problem is: How much of each? The Perot group wants to kick in just $3 million in equity and have the city raise $121 million in bonds, to be paid off out of hotel revenues and taxes. But such critics as city Finance Director Verlyn Leiker grouse that if revenues fall short, the city, not the Perots, could end up forking over up to $36 million in payments over 15 years to service the debt. The City Council tentatively approved the Perot plan by a vote of 10-2 in early November, but after the local outcry, put it on hold while an independent study is made.