Hotel Purchase - Time to Revisit the Decision & Process

In mid-August, the city manager proposed, and the Mayor and three Council members agreed (Laegeler, McElroy & Stockard), to have the Decatur buy the former Holiday Inn Hotel for $6.5 million. The transaction was negotiated by the city manager and agreed to by the "four-block" (affectionately referred to) prior to the long-planned auction that had been advertised nationally. The city believed that there would be no "appropriate" buyers at the auction. According to the Herald & Review:

Mayor Paul Osborne conceded the plan "sounds crazy at first." But he quickly added that the hotel and conference center is "critical" to the success of the community.

What We Think - We Agree it is "Crazy"

1. While many of us feel that the hotel is an important amenity for our community, the city should not be in the hotel ownership business.
2. Council members should not make decisions that are "gambles" or not using better judgment.
3. It is not the role of government, nor is the city competent to operate a struggling business in a very difficult and complex industry.
4. The purchase and decision was unnecessarily rushed and unknown throughout the community.
5. Adequate due diligence was not done. Serious economic issues were not addressed.
6. There were a number of viable alternatives for the city to support the continued operation of the hotel that were either ignored or pre-empted by the rush to enter into this transaction. These unknowns include whether or not other buyers would have presented themselves at the auction to make a legitimate offer to buy.
7. The City would better meet the needs of the community by promptly placing this property in private hands either by selling it out-right or organizing a public-private partnership to operate the hotel with private capital and limited taxpayer risk and resources.

The purchase has been highly controversial in the community and within the Council.

The Council was split 3 to 3 with the Mayor voting in favor of buying the hotel. The three opposing votes were strongly opposed. One Council member voting in favor said he "felt it was a gamble" and another voted in favor "against his better judgment" all said publicly during the meeting that votes were cast. The possible purchase was announced to the community two days before the vote and only a portion of the community knew about it when the Council voted. The Chamber of Commerce president supported the decision even though we have heard from numerous members of the the Chamber that they opposed the decision.

See Our Talking Points at right >> or click here.