By NICK GOSNELL
Hutch Post
HUTCHINSON, Kan. — The Hutchinson City Council took the first step toward buying the Atrium Hotel on Tuesday by approving the short-term financing needed to put the deal together.
"We went out to bid with local banks," said finance director Angela Richard. "We received seven responses. We are very happy with the level of participation and interest. People's Bank and Trust was awarded the bid. They had an average interest rate of .49%. We received from their bid all the way up to 1.5%. We are very happy with that rate. People's Bank has agreed to a closing date of October 5th, so that's when we would actually receive the money and that works with the timeline to purchase the Atrium."
The temporary notes are for $670,000. The purchase price of the Atrium will be around $1.6 million. The remainder will be paid out of the current reserve of the transient guest tax, which is just over $950,000. The notes will be paid off with transient guest tax over the next four years.
"I would reiterate that this has not been, at all, a hasty decision to get to this point," said councilman Jon Daveline. "We began this process back in 2017, when a task force was created to begin to deliberate over the anticipated demise of the Atrium Hotel, much to our disappointment."
City Manager Jeff Cantrell said discussions are already underway with a potential demolition company.
"I'm in discussions with one private group right now that may have interest in advancing that process," Cantrell said. "They understand the importance of bringing to the table private equity to prime the pump, if you will, for part of the project and to share in that burden with the city. I still want to vet them a little bit more. The Chamber is aware of this party and it's something we will probably sit down and talk about in the next couple of weeks."
It's likely going to cost upwards of an additional $1 million to tear the existing hotel rooms down and keep the convention space.
"That is a very logical conclusion," Cantrell said. "That is our intent. Unless we find ourselves in some really unexpected scenario in discussions and negotiations with a private developer, which I wouldn't support, those rooms need to come down."
The purchase could close in as soon as the next 60 days, but depending on the speed with which a deal can be struck on the demolition and depending on weather conditions, it could be next year before demolition starts taking place.