Financial arrangements for the planned Grand Gardner Hotel are being finalized by the city of Valparaiso. Urschel Development plans to re-purpose the 1899 Gardner School that for decades housed the Boys & Girls Club into a 58-room hotel, bar and event venue.
"Project costs have increased dramatically from, really, $20 million to roughly an investment -- at some of our meetings in the last week — are currently just over $43 million," Valparaiso Development Director George Douglas told the city council last week.
He said part of the reason is the increase in construction costs in recent years, along with the complexity of working on a 125-year-old building.
As part of the financing, the city council is being asked to issue up to $6.8 million in economic development revenue bonds. Those would be paid back using the increase in property tax revenue generated by the project, through a TIF district created for that specific purpose. Douglas noted that much of the property hasn't brought in any tax revenue at all before now, since it was used as a school, then a Boys & Girls Club.
Mayor Jon Costas called it a powerful use of tax increment financing. "Think about it. We're preserving an old building. We are putting, really, something back on the tax rolls that hasn't been on the tax rolls. It's creating something that we don't have, something unique that is needed," Costas said.
Additionally, he said it supports the vitality of the city's downtown.
Douglas also addressed council members' ongoing concerns about parking. He said a draft preliminary study showed little impact on the surrounding area, outside of major events.
"Now, we're doing an internal review because some of it comes to enforcement, so we've been engaged with the Valparaiso Police Department to kind of go over what current enforcement is in that area and what other possibilities might be there," Douglas explained. "How do we utilize technology?"
Council members are expected to take a final vote on the bond issuance next Monday.
