The Omni Hotel in San Diego
The Omni Hotel in San Diego

Sources are telling Insider Louisville that negotiations are ongoing between city officials and Cordish Companies over what began back in 2008 as a project dubbed City Center.

Restarted City Center talks have reportedly advanced to the point where Cordish executives are proposing a 600-room Omni Hotel as the flag, a project for which the Baltimore-based developer is seeking city and state incentives … a continuation of negotiations that resumed back in April.

The Irving, Texas-based Omni operates about 45 luxury hotels in the United States. Cordish and Omni also are in negotiations to build a hotel at Kansas City Power & Light, Cordish’s entertainment district in Kansas City, a private-public partnership.

In Louisville, sources say, the Omni would be built on the vacant Louisville Water Co. property at Third and Liberty streets, across from the Marriott Hotel Downtown at Third and Jefferson streets.

Picture 5
An aerial view of the block where sources say the Omni would be built.

Those sources tell us the hotel would take up the entire block bounded by Liberty to the north, Second and Third streets on the east and west, and Muhammad Ali Boulevard on the south.

Cordish officials did not return calls for comment. Chris Poynter, spokesman for Metro Mayor Greg Fischer, declined to comment about a possible economic development deal.

In April, Cordish officials reintroduced what began life in 2008 as a proposed extension of Fourth Street Live called City Center. The original City Center plan proposed investing $250 million to redevelop several blocks along Muhammad Ali – from Second to Sixth streets – into stores, restaurants condos, movie theaters and a hotel, with the city contributing the bulk of the money.

The vacant former Louisville Water Co. headquarters on Third Street was to be replaced by hundreds of thousands of square feet of new construction.

In April, Cordish condensed that original City Center plan into a 600-room hotel, with condos and limited retail, with only Third Street redeveloped.

At the time, at least one Louisville economic development official was guarded in his appraisal of the proposal.

Ted Smith, then economic growth and innovation officer for Louisville Metro Government, acknowledged Cordish mega-projects such as Fourth Street Live assume state and local governments granting tax incentives or a direct contribution by the city.

That was going to be a tough sell in a city running a budget deficit, about $14 million on a total budget of about $500 million for 2013, said Smith, now director of the city’s Department of Economic Growth and Innovation.

From our post:

Smith said he welcomes the proposal, which could potentially transform an entire abandoned block of Third Street including the former Louisville Water Co. headquarters, “and I am getting tired of looking at an empty lot.” But Smith said the reality is, the city is running a deficit.

“To be fair, it’s not just Cordish. Any (developer) is going to make that request. The city paid half of the cost of the downtown Marriott.

“The issue confronting us is, ‘How much will be public? How much will be private?’ ” That’s not yet clear, Smith added.

Smith acknowledged then that another deal with Cordish, which has never paid the city a cent in a “profit sharing” agreement for Fourth Street Live, might be a tough sell politically.

Since then, another complication has developed: multiple private-sector hotel deals either planned or started.

If a deal is reached with Cordish on an Omni Hotel, it would put 600 additional rooms – a hotel roughly the size of the Brown and the Seelbach hotels combined – next to the 591-room Marriott, and a block east of the 270-room Embassy Suites hotel Mary Moseley currently is installing into the former Stewart’s Dry Goods building at Fourth and Muhammad Ali.

Developer Bill Weyland, managing partner of downtown-renewal specialist CITY Properties, started construction in September of an eight-story, 162-room Hilton Garden Inn on the southeast corner of Fourth and Chestnut streets.

Developer Steve Poe’s Poe Companies just announced plans to build a boutique Aloft Hotel, a $25 million project at the corner of First and Main streets, which would put 175 rooms just east of the KFC Yum! Center.

Even before the Aloft announcement, it was clear the number of downtown rooms could increase about 33 percent by 2015.

Counting the 280 Embassy Suites rooms in the renovated former Stewart’s Dry Goods building at Fourth and Muhammad Ali, that would put about 775 rooms within four blocks of Fourth and Muhammad Ali, including the Seelbach Hilton, the Brown Hotel and Weyland’s Hilton Garden Inn.

Add the Downtown Marriott at Third and Jefferson and Moseley’s Galt House complex on Main Street, and that would total 3,000 hotel rooms in a 1-square-mile section of downtown.

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Terry Boyd
Terry Boyd has seven years experience as a business/finance journalist, and eight years a military reporter with European Stars and Stripes. As a banking and finance reporter at Business First, Boyd dealt directly with the most influential executives and financiers in Louisville.

7 thoughts on “Sources: City, Cordish in talks that could put Omni Hotel on vacant Water Company site

  1. I’m all for more hotel rooms in the urban core, but does a city our size need any more? I know the convention business is booming, but tourist would also like more shopping/retail, and things to do after 6pm. I am well aware that the economy has changed and the ability to borrow money is much more difficult, but this strikes me as “we need to do something because we said we were so lets build another hotel”

    I liked the original plan with the shops, movie theater, condos, apartments, and the like. Those are things downtown Louisville needs. In fact, those are things that the neighborhoods that surround downtown need. Do we really need another 600 rooms? What we need are more residents in the urban core. Why not “affordable” apartments and condos? What about the movie theater? that would be a boon for all of the surrounding neighborhoods because there aren’t any theaters close to downtown.

    This seems like another waste of our tax dollars. i was a supporter of 4th Street Live originally, but now I’m not. They first promised that there would be local venues and clubs, they all folded. They can’t keep anything open in 4th Street Live and yet they asked for money to development a company they own. They were suppose to redevelop the Old Louisville gardens and folded on that. They were suppose to bring $250 million in redevelopment and now they can’t. They really haven’t done anything they said they were going to do, yet we keep giving them money. Unlike other cities, we haven’t held them accountable either. That’s why we get second to fourth rate developments. If you don’t believe me look at what they’ve done in other cities.

  2. I know that available hotel rooms is one of the many deciding factors in approving a convention site, but it seems to me that the old Louisville Water Company block needs to be so much more. How many times are we going to whiff on downtown housing and amenities. Don’t make the mistake of limiting the housing to Luxury only. It’s a pretty fundamental formula as housing won’t succeed unless there are amenities (grocery, drug store, dry cleaners, etc. and there won’t be amenities unless there are residents there to support them. These amenities would of course serve conventioneers as well, but further it would tell the convention goers that our downtown is alive with people.
    I’m with Haven on the theater Idea. Make it brightly lit with an over the top Marquee with balconies and a bar inside. It could become a real destination
    Also, It is a bit difficult to tell if Cordish is our friend or is taking us for a ride. On one hand, if we get tax revenue from the businesses inside and employees that can spend their income elsewhere and stimulate the local economy it’s a good thing. On the other hand, is Cordish stiffing us on a contractual obligation and owes us big bucks? We need a honest and transparent answer from the city about what is going on. (I’m new* to the area so if these questions have been asked and answered, please forgive me.)

  3. My 1st question would be, “how much more is this going to cost Louisville taxpayers?” Everything that Cordish touches and some costing taxpayers millions of dollars with no return.

  4. There are wonderful buildings in this block including the water company building, the deco parking garage and the falls city theatre building and the big brick building on Muhammad Ali . This is the sixth copycat hotel idea in recent months. It’s like the apartment craze, can you say overbuilt?
    I wouldn’t trust Cordish to do anything other than make sure the site is cleared. Then we can all hurry up and wait. But local means nothing to Cordish. Anyone remember all the broken promises of the Galleria?? We lost an entire city block of fabulous structure, pasted the remains of the Kaufmann Strauss under a sloping glass roof, cut the traffic access out and destroyed what was left of Fourth Street. And they thought that was just peachy. We fail to learn from history and then are surprised when the same ideas fail…..again.
    SoFo or So What? Cordish is just more of the same quick tickle and they’re gone kinda folks.
    Happy Trails!

  5. I just took a look at that block. There are some wonderfully quirky and uniquely Louisville buildings there. Here is an excellent opportunity for adaptive reuse. The buildings are clustered onto the site so that a significant development can occur around the buildings and include the their unique character as grounding elements.
    I’m still questioning the motives of Cordish and whether they’ve been naughty or nice.

  6. Ok the institutional memory returns….! Notice the theatre building has a marquee….also take a very close look at the Marriot. Another full city block with two sides disengaged from the street. We saved the corner building by pasting on the facade (bleh), and the rest, once known as the “porno” block, was tossed into a dumpster. King Records, an institution made very famous by Roseanne Cash, was included. The result is a building that is, surprise surprise, urban on one corner, dead on the others.
    Louisville never knows what it’s got til its gone.
    Thanks Joanie.

  7. At the end of the 3rd quarter the core was averaging 70% hotel occupancy for the year, that is a very good number. Anything above 60% is considered good in the hotel industry and the downtown submarket will be able to absorb more rooms. I dont really liked the fact that Cordish is involved, but unfortunately the city has given them control of a very important block and a hotel development is definitely not a bad thing in that location.

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