Airport hotel delayed again
The path to a new hotel at Wichita Eisenhower Airport took another bend Tuesday when the City Council decided to offer the owners of the airport DoubleTree by Hilton hotel an extra month to match another developer’s offer.
It’s the third time the City Council has hit the brakes on the plan to lease six acres of airport land for 50 years to Mitesh Patel. Patel also developed and sold the Hampton Inn and Spring Hill Suites hotels at the airport.
The initial delays came after the discovery of errors in the lease that could have cost the city as much as $2 million over the life of the contract.
Now, the DoubleTree owners are asserting that a city deal with Patel could harm their hotel and infringe on the rights guaranteed in their lease with the city.
As part of that lease, DoubleTree has the first right of refusal on any hotel property at the city-owned airport. Essentially, that means before the city can lease a hotel site to another company, the DoubleTree owners have the right to match or beat the competitors’ offer.
Jay Haratsis, general manager of the DoubleTree, said Tuesday that there were significant differences in the lease agreement the city negotiated with Patel and what DoubleTree was asked if it want to match.
He also said it’s a poor time for another hotel at the airport. The DoubleTree’s business has dropped by nearly 8 percent in 3 1/2 years, as business has shifted and new hotels have sprung up in east Wichita, he said.
In those years, the DoubleTree has decreased its housekeeping and room-attendant wages by $230,000 because fewer rooms need cleaning, he said.
“When you’re in a down economy and a decrease in occupancy, you don’t get new business that’s coming in,” he said. “All you’re doing is shifting (market) share. You shift people from my hotel to the Hampton, the Hampton to the new hotel, or to the other side of town.”
Haratsis said things probably won’t pick up much unless the city builds a new convention center, which he offered to help plan.
After the meeting, Haratsis said DoubleTree hasn’t made a decision whether to exercise its right of first refusal.
Mayor Jeff Longwell acknowledged mistakes were made by city staff at the outset, both in the contract language and by originally putting the agreement on the “consent agenda,” the part of the council meeting where routine business items are passed in bulk without discussion.
Longwell said he thinks the city has complied with its legal obligations to DoubleTree, but there could be a perception of unfairness. So he made the motion to give DoubleTree an additional 30 days on its right of refusal.
“We now have to be overly cautious in our approach going forward,” he said.