Wichita considers sale of downtown Hyatt

The city of Wichita may be getting out of the hotel business.

Mayor Jeff Longwell says the city is considering the sale of the downtown Hyatt Regency Wichita, which it bought in 2001. The money could go toward fixing neighborhood streets.

It’s a market-driven decision, Longwell said, citing the recent sale of The Courtyard by Marriott Wichita at Old Town and the possible sale of the DoubleTree by Eisenhower National Airport.

“Recognizing that several of these hotels in our community are popular for people to invest in, we’re starting to see several of them go up for sale,” he said. “You don’t see them go up for sale if the market is down. We’re talking about business people. They recognize selling is about timing and they hold those assets until the timing is appropriate to sell.”

“I’ve always been told ‘Now is not the right time,’ ‘We can’t get the value out of it,’ ‘We’ll leave too much money on the table.’ But now I think that’s changed.”

The cost of the hotel and its garage was $22.5 million, according to the city.

But there’s no price tag yet or a time line for a deal.

First, the city will undergo a cost benefit analysis and get community input, Longwell said.

“We need to get a good return on our investment,” he said. “We are only going to sell if it’s a good deal for the taxpayers.”

Hotel profits pay for the hotel’s operating expenses, taxes and debt and for its maintenance and improvement reserves.

Since 2002, the hotel has generated more than $5 million in guest taxes, $8 million in property taxes, $12 million in sales taxes, more than $600,000 in rent for meeting rooms and more than $650,000 in profit-sharing payments, according to the city. Not all of that tax goes to city coffers.

The 303-room hotel opened in 1998 and was purchased by the city in 2001, when the council voted to buy out its private partners in the Hyatt Regency. Under the terms of the deal, the city paid investors $2.5 million from its insurance reserves and assumed $15.7 million in debt.

This story was originally published July 23, 2015 at 1:13 PM with the headline "Wichita considers sale of downtown Hyatt."