Hilton Garden Inn expected to open in Hutchinson in early 2025 - $18 M in IRBs passed

When the Kansas State Fair opens in 2025, visitors will have a new hotel to stay in.

On Monday, the Hutchinson City Council cleared a couple of hurdles so the Hilton Garden Inn can be built at 1715 N. Waldron St. In addition to the hotel, the developer will build a convention center and restaurant.

Along with agreeing to issue $18 million in taxable industrial revenue bonds, the councilmembers approved that the developer, Wichita-based Amber Hotel LLC, may apply for a property tax exemption with the Kansas Board of tax appeals, which will sunset in 10 years.

The city's director of finance, Angela Richard, explained to the councilmembers that the city would not be liable for the IRBs, nor would it be responsible for the repayment of the debt incurred from them.

"The city will become the lease holder," Richard said. "They (Amber Hotel) will become the lessee of the property. We are not responsible for any expenses in operating the hotel, the convention center or the restaurant."

The bonds will be used to finance the acquisition of 6.6 acres of land, the construction of the facilities, as well as furnishing, decorating and equipping the hotel, restaurant and conference facility, which will be located in the city. Debt service payments are the sole responsibility of Amber Hotel, and no city funds or taxes will be used to make these payments.

Richard explained the group will not be "paying property taxes on that property as an incentive to go forward with the project."

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The city set a date to examine whether to make the hotel's acreage be a part of a Community Improvement District, stating that any businesses outside or adjacent to this property owned by Amber Hotel will not be a part of the CID. Richard said several hotels in the city already have this status. This public hearing will take place at 9 a.m. on March 21 at city hall.

Raju Sheth, a managing member of Wichita-based Amber Hotel, LLC, which owns Home2 Suites by Hilton and Candlewood Suites, both in Wichita, also has some interest in other hotels in Wichita, as well as Hays and Texas.

Sheth said the convention center and restaurant upped the expenses to build the hotel.

"I don't have the exact count, but it is way more because of the convention center," he said. "There's about $3 million (to go into) the convention center. Plus, the restaurant is another $2 million."

As for the restaurant, Sheth said, usually the Hilton hotels bring in their own restaurant, but he is hoping to possibly change that up a bit in Hutchinson.

"We want local people to be enjoying their restaurant. It is not just for the hotel guests," Sheth said. "A lot of times, though, (because) it's inside the hotel, a lot of franchises don't want to be dealing with it."

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Economic footprint

Amber Hotel projects this complex will employ at least 20 fulltime and 40 part-time workers. The average salaries for the new jobs will be about 80% of the county average wage.

The developer also expects the property will generate 80 construction jobs and around 30 new community residents, claiming in the first year the facility will initiate more than $1 million in worker income. By year 10, they expect retail sales to top $72 million cumulatively.

Because the enterprise is expecting from 40,000 to 59,000 visitors per year, the city is expected to gain the sales taxes generated by the guests. However, 3% of the 7% transient sales tax is requested to be refunded to the developer and placed toward the operation of the convention center.

The property will be located on Waldron Street between E. 17 Avenue and E. 20 Avenue, near Ken Kennedy Freeway and close to Aldi. There are currently Hilton Garden Inn franchises in Hays, Manhattan, Salina, Topeka and Wichita.