Broadway Hotel lawsuit brought up during TIF meeting
COLUMBIA - Columbia's Tax Increment Financing commission opened the floor to hear from Columbia residents on possibly granting $2 million for a second Broadway Hotel tower.
Marjorie Lewis, a lawyer for QuesTec Constructor Inc., sent a letter to commission members asking them to consider the Broadway Hotel debts before granting the TIF.
"Killian Construction was the original contractor for the Broadway Hotel project. And it employed numerous subcontractors and material suppliers to perform the work the construction of the hotel itself. Killian Construction is asserting that it was not paid in full for its work on the project," Lewis said. "And several subcontractors, including QuesTec, are asserting that they were also not paid in full for the project."
The Columbia City Council granted David Parmley a TIF back in 2014 to build the first Broadway Hotel tower. He disputes Lewis's claim that Broadway Lodging LLC has a contract with QuesTec.
"Yes, it is true that Broadway Lodging LLC is involved with the general contractor Killian Construction company," he said."We were surprised to see the letter form QuesTec with which whom we have no contractual relationship with. and with to whom we have no obligations. QuesTec was a clip contractor who was hired, on the project, by Killian Constructions."
During a power point presentation at the hearing, Parmley's team said the project has no risk to the city and "no up-front sum payment to the applicant."
"The only source of those funds are the additional real estate taxes that I will be paying if I am able to develop," Parmley said.
In Lewis's letter, she said Broadway Lodging LLC owes QuesTec more than $240,000, not including interest and attorney fees for their work four years ago. While the total value of the debt in the lawsuit is more than $3 million.
"We've sent a letter to the commission members because I think it is important for the commission members to know that there is a lawsuit involving the existing Broadway hotel building in which the general contractor and various subcontractors are seeking substantial amounts for their work on the project," Lewis said.
Parmley said that in 2014, Killian Constructions delivered the project later then stated on the contract and not completely finished. He also said the City of Columbia also has cases with Killian Construction on the same problems, and that the lawsuit is not related to the TIF request.
The entire project will cost more then $20 million.
"Given that we have no contractual relationship with QuesTec, we were very surprised by the letter. To say the letter can out of left field, would be an understatement," Parmley said.
Parmley previously said the amount requested has increased because the costs required for a project like this have gone up.
“In this case, the numbers are actually looking worse because the cost has increased about 38 percent over four, five years ago,” Parmley said.
The project includes the development of a second seven-story tower with 80 rooms, bringing the total number of rooms to 194. The second tower would triple the current meeting space, adding a 6,000 square feet rooftop ballroom and another 2,000 square feet meeting space in the ground floor.
Tony St. Romaine, part time consultant for the City of Columbia and former deputy city manager, said for a TIF to be accepted by the city council, the project must:
- Not be able to happen without the money from the TIF
- Not ask for a TIF that exceeds 20 percent of the total amount of the project
- Contribute to the city’s infrastructure
- Have proof that it has the financial means to be completed
- Investor must personally contribute at least 15 percent
- The city has no risk involved in the project
"The financing of this project would not be feasible without the assistance and provision of public financing including, but not limited to, tax increment financing," said a letter from Carrollton Bank, which supports the TIF.
The second tower would be built at 1104 E. Walnut. Parmley said he does not currently own the property, but has a contract to purchase the property by January 2018.
Lewis said, so far, it looks like the lawsuit will continue for sometime.
"Its been going on for a long time. And, you know, we are hoping to bring the lawsuit to trial possibly in April or May of next year. But, it doesn't look like any possibility of settlement at the moment," she said.