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January 18, 2011


Cornhusker Hotel in trouble — while four more downtown hotels are on the drawing board

by Deena Winter

Cornhusker Marriott in Lincoln

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.
Yep, four.
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.

13 Comments Post a comment
  1. Mike
    Jan 18 2011

    Great article – this is the kind of reporting we used to get in the Journal Star. We miss you there Deena but glad to read your blog.

  2. John Duhon
    Jan 18 2011

    The City of Lincoln is projected to grow about 30% over the next 20 years, and cosidering the expansions of the Haymarket Arena and the Innovation Campus why would anyone be shocked that 3 new hotels are under construction? Will those 3 hotels increase the occupancy capacty by 30%, just to keep up with population growth? I doubt it.

    Hotels, even very old and prestigious hotels, go bankrupt every day. I don’t think one hotels financial situation should sound alarm bells on a city moving into a bright, prosperous future.

    • ej
      Jan 18 2011

      “Hotels, even very old and prestigious hotels, go bankrupt every day. I don’t think one hotels financial situation should sound alarm bells on a city moving into a bright, prosperous future.”

      Ditto! Given the apparent track record of Shubh Hotels, assuming the Cornhusker’s problems are due to any saturation in the Lincoln hotel market, rather than simple mismanagement, requires a bit of a leap.

      As for Mr. Downtown Holiday Inn Manager, sounds like someone doesn’t want additional competition. Shocking! OK, so he doesn’t like the city making it easier for the competition to enter the market. I get that. But I’ve yet to hear him speak out when the city subsidizes new business, events, conventions, conferences and other activities that benefit his hotel. My company is excited that when our clients travel to Lincoln, they’ll now have more choices when deciding where to stay in downtown Lincoln.

  3. Scott Wendt
    Jan 18 2011

    Won’t these new people be buying homes rather than staying in hotels?

  4. Stacy
    Jan 18 2011

    “Hotels, even very old and prestigious hotels, go bankrupt every day. I don’t think one hotels financial situation should sound alarm bells on a city moving into a bright, prosperous future.”

    I have to say ditto on this one too. Simple research, that anyone can do (and some should have) shows that Shubh Hotels has had issues for some time and that this is not the first hotel that has been shut down to the companies inability to manage their investments. Sometimes it is what it is.. and not some dooms day, the sky is falling, speculation that some want it to be.

  5. John Duhon
    Jan 18 2011

    Scott, won’t these people have relatives and friends visiting them and staying at hotels?

    Don’t ever let anyone tell you your slow Mr. Wendt.

  6. Paul " Mike" Grieger
    Jan 18 2011

    Besides the Cornhusker..4 Other Lincoln hotels are in default and or under protection of federal Court systyem.
    I forwarded my findings to the Cities urbandevelopment dept…To date no reply.
    I wish to opt out of the ” downtown arena ” tax.
    For the record, I own the trade name “HAYMARKET HOTEL.’

  7. Sammy
    Jan 19 2011

    The funny part of all this is what will people be staying at these hotels for? Do you think the arena is going to pull in acts that require you to spend the night, I doubt it, it’s not big enough. Besides how may acts can be fit into the time scheduled for the arena shows when it’s used mainley by Basketball?

  8. John Duhon
    Jan 19 2011

    Sammy, the men’s and women’s basketball schedule combined is about 40 days out of the year. That means there are 325 days out of the year for other events.

    Why don’t you check out arena’s of silmilar sizes and you’ll see that there are week long events such as business conventions or religious retreats that use arenas for entire weeks. People will need someplace to stay.

  9. sammy
    Jan 19 2011

    John D, why don’t you really check the schedule to include practice time or better yet look at the contract the city has with the university.
    Yes there are sometimes it would be nice to stay close to the arena but not the amount of times suggested, nor at the cost..

  10. Roger Yant
    Jan 21 2011

    OMG, the city and it’s leaders are all nuts. We need another four hotels in downtown. Ya, right, I would like to sell my 2003 Caddie to the city for $100,000. We the taxpayers should be outraged about giving tax breaks to these new hotels, build the darn things on your own, go busted it’s your problem. John Duhon, why do you find it necessary to call or make fun of someone. Your comment to Scott Wendt. At least Scott had the courage to stand up for something he believed in, not fearing people like you calling them names. I think Mr Duhon you stated the the projected success of Innovation Park and Arena calls for the increase in hotels. (projections are gusses that is all they are) Someone said, (Mr Duhon) well aren’t your family and friends going to be coming to Lincoln and will need the hotels, well, as for me sir, if we have friends or family coming to town for any event, they stay at our home FREE. You must be a tight ass to make your friends and relatives stay in hotels. I’m really tired of all the tax breaks that the city is willing to give out. We need tax revenue to pay for the arena.

  11. Terr Gill
    Jan 21 2011

    Who is Roger Yant?

  12. Jim Hixson
    Nov 18 2011

    Unless I am mistaken, aren’t tax breaks just a reduction in taxes that the Hotels would have to pay? If I am correct, if the hotels are built some taxes will be collected on these properties. If the Hotels are not built NO taxes will be built from these properties. What do the Lincoln tax payers have to lose. I live in outstate Nebraska. I am a season ticket holder for UNL Football as well as visiting several other times a year. I would love to stay downtown on game days but never do because the asking prices are outrageous by the existing hotels (besides they are all booked anyway). I look forward to having more options for lodging downtown. If I find something downtown at a reasonable price I plan to stay every home game. The taxes on my hotel stays and food while staying go to the city of lincoln, not outstate Nebraska (not to mention the money I will spend to support Lincoln businesses). I will be paying your taxes and I don’t live there to use the services gained from these taxes. Sounds like a good deal for Lincoln to me.


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