City moves forward on convention center

The developers of a Newton hotel and conference center hope to be ready to begin construction no later than October.

Private developers from the Wichita area, Tim Johnson and Shawn Penner, presented information about the project to the city commission Tuesday.

Johnson explained the 14,000-square-foot conference center would have a flexibility with moveable walls proposed in the construction of the building.

The proposed buildings would be located north of Broadway to the east of Interstate 135.

From the main entrance into the property, the conference center would be on the west side, and the 80-room hotel would be on the east side of the main drive.

The buildings would be about 150 feet apart. There also will be two additional commercial lots for the developers to sell to other businesses interested in being located near a hotel and conference center.

“We’re working on securing a franchise agreement,” Johnson said. “We don’t expect any problems with becoming a Holiday Inn Express.”

As private developers, the group is seeing some problems with the banking industry. However, the greater challenges Johnson said they are facing is the continued increase in construction costs. He said asphalt alone is four times higher than it was when he built a hotel in Andover a few years ago.

Tim Johnson, community development director for the city, presented some financial figures associated with the project. Overall, the conference center could cost the city more than $2 million over 20 years. He presented several alternative payment options for the city to consider.

At this point, however, costs and revenue are still speculation. Without actual costs, the revenue amounts needed to repay debt can’t be set in stone.

The project will receive some funding through a bed tax increase and property taxes from the redevelopment area where the facility will be built.

The Newton City Commission approved the development agreement with Tim Johnson, Shawn Penner and Todd Kasitz.

Construction on the project will not begin until the final design and plans have been presented and approved by the city commission.

If at any time, either party feels the project is no longer profitable, they can withdrawal from the agreement, but at some points financial reimbursement may be necessary to the other party.

In other business, the commission approved a resolution declaring the intent of the governing body to issue variable rate demand hospital revenue refinancing bonds on behalf of the Newton Healthcare Corp.