Hotel funding option draws fire

by Tanya Fogg Young, The State

Some critics of the Columbia Hilton convention center hotel said Friday the city is wrong to pursue financing through state-sourced bonds intended to spur development in more economically distressed areas.
Four organizations, including the S.C. Small Business Chamber of Commerce, on Friday questioned Columbia’s efforts to use Jobs-Economic Development Authority bonds in financing the project.
Columbia Mayor Bob Coble defended the approach, saying the tax-exempt bonds were but one of three financing options Columbia City Council is considering. Coble said he personally favors an option in which the non-profit corporation that will own the hotel would issue bonds.
The 300-room hotel is being built to serve the new Columbia Metropolitan Convention Center. It will be financed with &69.9 million in city-backed revenue bonds and $1.5 million from the Hilton Hotel Corp. The city recently added bondholder insurance to lower the interest rate and reduce payments.
Coble said only a full-service convention center hotel such as the city Hilton will help draw the conventions and visitors needed to create jobs and strengthen the economy.
Opponents Friday repeated suppo9rt for a limited-service hotel that would be privately developed.
Frank Knapp, President of the Chamber of Commerce, said his organization and others oppose any “governmental mechanism that would allow public to compete with private.”
“All of stand for providing a hotel for the convention center, but the city would not create any more jobs than a private developer would,” Knapp said. “The city is trying to keep the cost down, but it’s not an appropriate use of JEDA bonds.”
Elliott Franks III, President of the S.C. Jobs-Economic Development Authority, said the organization’s focus has been on the rural, less developed areas of the state needing economic development.
“But that doesn’t mean we wouldn’t entertain or support a venture in Columbia, Greenville or Charleston,” Franks said. Franks said the city is a loan applicant and that the authority is awaiting additional financial information from Columbia.
Bonds from the Jobs-Economic Development Authority were used in the financing of the Myrtle Beach convention center hotel, Franks said. Critics of Columbia’s plans to build the Hilton have pointed to the financial woes of the city-financed $48 million Radisson Plaza Hotel next to the Myrtle Beach Convention Center.
The hotel, which opened in January of 2003, is projected to end its first budget year in March with a $1.2 million operating loss.
“If a No. 1 tourist destination in the state can’t keep a hotel in the black, how can Columbia do it? Asked Ed McMullen, President of the S.C. Policy Council, another of the groups opposing the city Hilton at Friday’s news conference. The others were the S.C. Tax Payers Association and Coalition of Columbia Citizens.
The groups are urging Columbia residents to “sign, seal and send” a mailer expressing opposition to the city’s publicly financed hotel.
Some 20,000 mailers will be distributed Monday in editions of The State newspaper going to subscribers in the city of Columbia, said Candy Waits, a member of the Coalition of Columbia Citizens.

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