Cornhusker Hotel in trouble — while four more downtown hotels are on the drawing board
With the venerable Cornhusker Hotel (that’s what we like to call it) teetering on the edge of foreclosure, one has to wonder what’s going through the minds of the developers who have four more hotels planned for downtown Lincoln.
And the city plans to dole out financial incentives to all four of them — infuriating some existing hotel owners. There’s the hotel that will be built across the street from the yet-to-be-built arena, a hotel to be built by WRK in the Haymarket, another Haymarket hotel literally across the street from WRK’s being planned by B&J Partnership, and a hotel on the block straight south of the Gold’s Building.
I’ll be shocked if the Gold’s project ever gets built — but the other three seem pretty sure to be built right now. Buildings have already been demolished and work is scheduled to begin this year on the two Haymarket hotels.
But if the Cornhusker is having financial problems, how will four more hotels fare? And should the city be giving developers tax breaks to help them build, when most other Lincoln hotels are not exactly filling their beds?
The owner of the downtown Holiday Inn has previously expressed his unhappiness with the city’s plans to subsidize up to four more downtown hotels — but city officials have so far been undeterred, saying, in essence, if the market is too saturated, the developers won’t be able to get financing anyway.
The Holiday Inn owner warned in August that Lincoln’s occupancy rate is only about 54 percent, and said Lincoln didn’t have room for one more hotel, much less four subsidized hotels. He flat out said he would lose his investment in the Holiday Inn if the hotels are built.
Meanwhile, the Cornhusker Marriott will go up for public auction on Feb. 17 unless it comes up with enough money to pay its former management company, Island Hospitality Management. Island Hospitality is trying to force the issue by by threatening foreclosure against Shubh Hotels Lincoln, which owns the Cornhusker but has lost most of its other hotels nationwide due to financial problems.
Island Hospitality recently obtained an $800,000 judgment against Shubh Hotels for unpaid bills and got court approval to garnish rents from office tenants in Cornhusker Plaza, according to the Lincoln Journal Star.
It’ll be interesting to see if any city officials have anything to say about any of this, given their plans to help build four more — I’m not going to hold my breath though.