HomeMy WebLinkAbout12-03-2010 City, owners plan renovation for downtown landmark
Office of the Mayor
NEWS RELEASE
December 3, 2010
10 a.m.
City, owners plan renovation for downtown landmark
Contact:
Mikki Dobski, Director of Communications & Special Projects, 235-5855 or 876-1564; Don
Inks, Director of Economic Development, 235-9371; Melissa Collins, Senior Vice President for
Marketing, 1st Source Bank, 235-2495;
The 1st Source Center, a nine-story, glass-and-steel landmark built 30 years ago in the heart of
downtown, will undergo a $14.2-million renovation, according to a public-private agreement
announced today by the City of South Bend.
Two buildings, connected by an atrium, are home to a Marriott Hotel and the 1st Source Bank
corporate headquarters as well as offices for Barnes & Thornburg LLP (an attorney group) and
Merrill Lynch among others.
The agreement includes a multi-year commitment from the principal occupants – 1st Source
Bank (the principal tenant) and Host Hotels & Resorts (owners of the Downtown Marriott) – to
remain downtown, the latter in the form of an “upscale or upper-upscale hotel.”
The agreement, which follows months of negotiation, is subject to approval by South Bend’s
Redevelopment Commission and the Common Council. The Commission will hear the proposal
in its Dec. 3 meeting with the matter on the agenda for the Council’s Dec. 13 meeting.
“These major re-investments will freshen and update a landmark in our city skyline to prepare it
for another generation of service as we retain key businesses in the heart of downtown,” said
Mayor Stephen J. Luecke. “I welcome this new investment in our downtown, the jobs it will
create during the renovation period and the jobs it will keep in South Bend for the long term.”
According to the agreement, the City would purchase the facility’s parking garage for $6.5
million, with the owners of the buildings remaining responsible for all operating, maintenance
and capital costs.
In turn, Host will invest a minimum of $8.225 million ($4.55 million of the garage proceeds plus
$3.675 million of its own funds) in improvements to the hotel facility. 1st Source will invest a
minimum of $5.775 million ($1.95 million of the garage proceeds plus $3.825 million of its own
funds) in five of its South Bend facilities. According to the agreement, the City’s dollars, made
available from reserves and an Urban Development Action Grant, will be placed in escrow and
would become available only after the private sector dollars are invested. In addition, the
agreement includes the refunding of City funds in the event operational standards are not met.
Founded in South Bend in 1863, 1st Source Bank employs 595 people in South Bend with total
wages of $32.9 million.
According to Christopher J. Murphy III, chairman of 1st Source Corporation, “We are pleased
that we have reached this agreement which allows us to continue to call South Bend our home.
We started here and, with this agreement, we’re staying here. With clients throughout the United
States and in Latin and South America, 1st Source Bank continues to expand while servicing
many of our clients from our South Bend headquarters building. 1st Source has been a fixture
downtown since 1863, and we hope to continue to provide our clients with straight talk and
sound advice for many more generations to come.”
Host Hotels & Resorts Inc. is an S&P 500 and Fortune 500 company, which is the largest
lodging real-estate investment trust and one of the largest owners of luxury and upper upscale
hotels. Host owns 104 properties in the United States and nine international properties, totaling
nearly 62,000 rooms. The company partners with a variety of premium brands in the operation of
properties in more than 50 major markets worldwide.
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“On behalf of Host Hotels & Resorts, we applaud the City’s efforts in working with 1Source
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Bank and Host to preserve the 1 Source/Marriott project as a vital part of downtown South
Bend and in supporting Host’s efforts to maintain the hotel as a first-class facility,” said Andy
Lewis, senior vice president, acquisitions and dispositions of Host Hotels & Resorts.
In South Bend, the Downtown Marriott employs 100 people.
The plan is similar to a 2007 renovation of the 14-story KeyBank Building and plaza, 202 S.
Michigan St., in which Baker & Daniels LLP joined the building’s owners, The Hinman Co. and
KeyBank, in investing between $7 million and $8 million to renovate the building, while the City
upgraded the street-level plaza using resources from the downtown TIF district.
“A generation ago, 1st Source and Marriott served as valuable anchors when this facility was
first built as a cornerstone for downtown development,” Luecke said. “That important role is
strengthened and extended today with this commitment to reinvestment in our community. This
one-time inducement from our reserves exemplifies one of the ways in which the City of South
Bend works with local businesses to expand investment in our community and grow the local tax
base.”
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