The city of Wichita will be out of the hotel business and $20 million richer in a few weeks.
The Wichita City Council on Tuesday unanimously approved the sale of the Hyatt Regency Wichita to casino magnate Phil Ruffin.
A final agreement is expected in about 60 days and will include language requiring the hotel to remain a Hyatt or other upscale flag hotel.
With his offer of $20 million, Ruffin was the top bidder for the hotel on the east bank of the Arkansas River at Waterman.
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The only other bid was $10.4 million, by a group of investors including George Laham, Jack DeBoer, Tony Isaac and Bruce Christenson.
Council members broadly agreed that it was time for the city to sell the hotel it bought into 15 years ago.
“One thing we probably all agree on is the city should not be in the hotel business,” council member Jeff Blubaugh said.
Blubaugh, a real estate agent, said the hotel hasn’t appreciated much since the city bought it and generates only about $250,000 annually in profit for the city after operating and maintenance expenses.
“I think any investor … would probably sell, move on and get another investment,” he said.
However, council member Janet Miller said the hotel has been a great investment. The purpose wasn’t to make money but to “essentially salvage and save what was left of Wichita’s conference and convention business,” she said.
At the time the council bought the Hyatt, “downtown Wichita was a desolate place” with only one aging and declining hotel near the Century II Convention Center, Miller said.
Since Wichita bought the Hyatt and primed the convention market, five hotels have sprung up in the area, which wouldn’t have happened without the intervention, she said.
Wichita bought the hotel when the original owner announced plans to sell it because it wasn’t meeting profit goals.
The city paid $18.3 million for the hotel, in addition to $10.6 million it spent on development subsidies to help build it.
The council felt it needed to keep an upscale hotel at the site, as a gateway to downtown and attached to Century II. The city’s purchase ensured the hotel wouldn’t be bought and reflagged to a cheaper chain.
The hotel has 17 floors, 303 rooms, 40,000 square feet of meeting space, two restaurants, a cocktail lounge, an indoor pool and a 500-car attached garage.
The city has a contract with Hyatt to manage the hotel, which is scheduled to run through 2026.
Ruffin’s offer about matches the price of the most recent comparable sale, the DoubleTree by Hilton hotel on city-owned property at Wichita Eisenhower National Airport.