December 17, 2017
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The Future is Now

HCW is set to break ground on Evansville’s highly anticipated Downtown hotel
HCW LLC CEO Richard E. Huffman

Nearly three years after the Executive Inn Evansville was torn down to make way for the Ford Center, Evansville is just weeks away from breaking ground on a new $71.4 million hotel complex with a 10-story, 257-room hotel, a residential tower, and conference center. HCW LLC, headquartered in Branson, Mo., will develop the project. In October, editor Kristen K. Tucker met with CEO Richard E. Huffman in the company’s corporate offices overlooking the Payne Stewart Golf Club, the No. 1 rated golf club in Missouri (by Golfweek) that also was developed by HCW.

Is HCW ready to come to Evansville?
We are ready to come to Evansville. We’re excited about it. Obviously, there is lots of work to be done, but we’re ready to get there.

Do you have a target date for groundbreaking?
We’ve been visiting with the city engineering department and staff so we are hoping to start the dirt work in late December. The actual start of concrete footings will be first of March.

We are here in your beautiful offices in Branson. Please explain how your company was formed.
Branson, Mo., is one of our three offices. I am actually from Wichita, Kan., and came over here in 1992; I had purchased a resort — Fall Creek Resort. That was our first major asset. I had not planned to move here. I had actually planned to develop the resort and resell it. We got over here and fell in love with the lakes and streams and the Midwestern people. It was a lot like Wichita, but with hills and trees. So, my wife and I — we had just had our fifth child — he was a year old when we finally moved in 1993. We opened up an office then. It was on the other side of town. Now we are on the north side, where the growth is. We have an office in Wichita with 13 or 14 people and a small office in Phoenix, Ariz., on Biltmore Circle.

How long have you been developing in Arizona?
We did our first development in Arizona in 1997 in Mesa. We built a resort. In 2005, we developed a 300-apartment unit. The last several years, during the downturn, we have been buying land from banks and what have you. Since then, we have sold most of that land. Now, we are building 300 units in Chandler, Ariz., by its beautiful mall (Chandler Fashion Center.) We have a beautiful hotel (a Residence Inn by Marriott) designed and ready to go in Tucson, Ariz., near the campus of the University of Arizona. It’s got a lot of campus activity being built into the hotel. It’s a very unique project. Very neat.

What attracted you to Evansville and our convention center hotel?
Quite honestly, I didn’t really know where Evansville was. Being from Wichita and also with Springfield, Mo., being right up the road — those are Missouri Valley Schools. So we were familiar with Evansville, but we really didn’t know where it was. I had a friend who had told me a bit about the city. We received an RFP (request for proposal) from Hunden Strategic Partners, Chicago. (Hunden Strategic Partners is a full service real estate development advisory practice specializing in destination assets hired by the City of Evansville to manage the RFP.)

When we saw the opportunity, we went to Evansville and looked at the market and looked at the Downtown and, quite honestly, we were taken aback by the Ford Center. We thought it was pretty amazing that a town the size of Evansville could have an arena like that. We met with the operators of the Ford Center and then also the county convention center (The Centre) and that was a nice facility — way under utilized. We are really big on urban development — so we thought it was a good opportunity. We decided to go ahead and submit the proposal. We were awarded the RFP in January 2013. Ever since then, we’ve been working toward today.

Tell us about the planned brand of the new Downtown hotel.
It’s a Doubletree by Hilton. We have made application and we totally expect that to be approved. Doubletree has come to Evansville early on and looked at the market. We are not sure what we will name it yet. That’s still up in the air. Doubletrees, around the country, are being branded different names. For example, in Chicago, there is The Wit. That’s a Doubletree. The Tropicana in Las Vegas is a Doubletree. It’s been totally remodeled and is a really nice property.

What is unique about the hotel?
What makes this hotel unique is its location. It will be very easy to get in and out. It is being connected by two skywalks. That’s very attractive for convention planners. The 10th floor will have a rooftop bar and restaurant with outdoor seating areas overlooking the river to the south. It will also feature outdoor fire tables. Inside, it will have a lounge feel. If you are at a convention, you can relax, visit, and do some business up on the 10th floor restaurant. It will also be a great place for people to enjoy before seeing a show or game at the Ford Center.

There is a conference part of the hotel. It is not very large, as we want to use the existing convention center for most of those activities. But, as you know, The Centre is quite large — large rooms with high ceilings; it is not really geared for small events or weddings. We opened a new conference center and hotel in Manhattan, Kan., (Manhattan Hilton Garden Inn and Conference Center) which is connected there with Kansas State University and Fort Riley (a U.S. army base). The conference center had 47 weddings in the last year. We designed the conference space, like yours will be — no typical ugly chandelier hanging down. At Kansas State University, their color is purple, so when we had the grand opening, we made the conference center purple. LED lighting provides color-changing effects.

Tell us about the new technology you are incorporating.
When you look at a 5-year span in technology, a lot changes. This brings us the opportunity to bring in new technology and be a frontrunner in the industry. When meeting planners come in to interview with our sales teams, they want to know: What is unique about your place? Do you have secured Wi-Fi? Do you have the built-in televisions and wireless microphones?

In Evansville, we’ll have the opportunity to meet those standards with the conference center. It’s not a big room, about 6,000 square feet. It can hold 550 people. Our focus is mostly to steer the business into the Centre to get that facility active.

Did you ever think this hotel would not be built?
Well, when the vote changed, or when we were informed it was going to change, we had, naturally in our office here, started planning to shift employees’ focus to other areas — because we are busy and have seven active projects here. You have to face reality. We were disappointed; no doubt about it at all. We didn’t understand it, because it is such a unique opportunity. I’ve never been to a city that has a $125 million arena and a big convention center and all this Downtown business and no hotel (aside from Tropicana, which stays consistently busy with its guests). We thought, “Wow, they need a hotel. Bad.”

And the mayor, I have to give him loads of credit. He fought hard and he fought long. I received a call on that Thursday (Sept. 5) evening that the vote was going the other way (at the planned Sept. 9 Evansville City Council meeting). Then, the mayor and his staff and several local business people gathered and worked all weekend. Come Monday, they had a plan, it was presented to council, tabled, and the following week, it (the city council’s vote on the city’s $20 million investment in the project) passed 9 to nothing. It went from a losing vote to a winning vote.

Your company is contributing $40 million, the city $20 million, and a group of investors, led by Old National Bank, is contributing $11.5 million. Have you seen this type of financial structure before?
Never, ever before. Never before have we encountered this. This is a true commitment of the business leaders of the community. Quite honestly, it is disappointing to me because I truly believe it was the city’s responsibility to do this — not the private citizens. This is what government is for. There’s a TIF (tax increment financing) district Downtown; the city has a way to get paid back — these guys don’t. I think it was a little bit political. I think there were folks in the city who tried to weigh the vote with the council. That’s sad. But it does happen. At least the business community got past it and said, “Hey, we’re not going to let them defeat us.” Now you’re going to have a great facility, thanks to the community.

How is your relationship with Councilman John Friend, the city council’s finance chair who led the opposition to the original financing package for the hotel? (Friend later changed his vote and supported the public-private venture.)
I really haven’t had any interaction with John Friend except for one meeting. Some of the things he wanted or asked for were a little ridiculous. We’ve never had to do some of the stuff he asked for and we’ve done a lot of business around the U.S., and I think our record speaks for itself. We’ve been in situations before where we’ve had the city council against us. You just get past it.

In the end, you did not provide the city council with the additional financial reports they asked for.
We had provided them a report from a third party company already that was only six months old. We also provided them with a letter from our bank that showed that we had the necessary funds to pay cash for the development.

Will the HCW planned development benefit the whole community? Will it benefit other hotels?
Absolutely, it’s happened in every community we’ve worked in. There are lots and lots and lots of examples around the country. We have select service hotels in other cities and know (a conference center hotel) is a good thing. Not all guests will pay our rates. Some want to stay in a select service hotel for price or affinity programs. Or, we bring in 1,000 people to a conference and we only have 250 rooms. Where are they going to go? Other hotels. We operate two conference center hotels (in Manhattan, Kan., and the Hilton-Branson Convention Center Hotel). With both of those, we are constantly sending overflow to other hotels.

How will you market the hotel and conference center? Will you work with the Evansville Convention & Visitors Bureau?
It takes a couple of years to market conferences. Hopefully we’ll announce a sales staff this winter. (Pillar Hotels and Resorts, based in suburban Dallas, has been selected to manage the hotel. Pillar manages more than 200 hotels in 35 states, including in Indiana, Kentucky, and Illinois.) We’ll have a sales staff of four to six full-time people who will sell the property. The CVB is a huge help, but this is a for-profit venture, and we’re going to look for groups that can pay a little bit more.

Heads in beds bring nice amenities to communities. Do you agree?
Prior to the convention center in Branson, that business was not coming to Branson. While the gross revenue for the two HCW hotels here is $20 million just at the hotels, we know each customer spends a few hundred dollars more while they are staying here and in the other hotels. We don’t know what that number is, but it’s been great for the other hotels. It’s been great for this town. (The Hilton-Branson Convention Hotel has 291 rooms; across the street, the Hilton Promenade boutique hotel has 193 rooms.)

Tell us about the residences Evansville’s project includes.
We are planning 78 units going in — all are what we call A-plus in quality and style. The tower is 10 stories tall, with very chic interiors, great views — on half the building of the Ohio River. Residents have the privilege of using the hotel exercise area. You’re staying in your apartment and you’re having guests over; you can call down to the restaurant and have them deliver right to your own residence a bottle of wine, a cheese tray, oysters on the half shell. Take a swim in the pool in the evening, exercise in the state-of-the-art facility, and maybe finish it off by having late night cocktails in the club. That’s pretty nice living.

What image have you formed of Evansville?
I guess I’ve been pretty surprised. The first time I went to Evansville, I flew in. I came through some areas that were old. My first thought was, what’s the city about? Obviously, by making a large investment in the community, we went out and drove neighborhoods. We wanted to see who lives here. Then we had a really nice group of business folks who flew to Branson. After meeting some of your business leaders of very large corporations and listening to them and spending quite a bit of time with the mayor, our attitudes changed a lot about Evansville. We thought there’s a lot of opportunity in this town. Plenty of people who will enjoy the type of services we bring. Is the market deep? No, it’s not real deep but it’s sure darn well deep enough for 400 or 500 nice units Downtown.

Who will live in the residences?
I just attended a conference at the Arizona Biltmore. This economist told us that in the next 10 years, 17 percent of rural America will move to our cities, and cities better get their infrastructure in good order. It’s obvious the younger group is concerned about sustainability; their time is not to be spent commuting; their leisure time is more important to them; they want to have things taken care of for them. They are very high tech, obviously. Those are the types of clients we think we’ll see in Downtown Evansville.

Through some of the meetings we’ve gone to, we’ve had numerous business owners say they want to rent one of the apartments Downtown. I’ll say, “So you’re moving Downtown?” They’ll say, “No, we’d just like to have a place Downtown, where we can go when we have events Downtown, and put up our friends when they come to town.” Some of these people have asked me if they can be built bigger, as these are not large units.

Our plans for them are complete, but I have a feeling the insides will change a bit based on consumer demand. And you have to pay attention to that. We want to pay attention to that. Maybe it won’t end up being 78 units, but 68 units. But the size of the building will be the same. And of course, the possibility for a medical school (Indiana University Medical School-Evansville expansion) being Downtown and possibly next door would be phenomenal as that just opens the market for more housing for the students and faculty.

What do you enjoy doing in Evansville?
My wife, Sue, has not yet been to Evansville. We were just speaking of that. We have five children and have been married 31 years and are empty nesters. We do have a home in Phoenix where we do spend our winters. We have an office there; it works out great for me. But she’s been asking me, “When are you taking me to Evansville?”

So far, it’s been late nights, until 11 or 12, early mornings, and back and forth drives. I’m looking forward to spending two or three days there. I’m looking forward to spending time in the casino; I’ve only walked through to go to dinner.

When will we cut the ribbon and see the first guests staying the night?
It’s 525 days from when we start construction. To be fair, our construction schedule will be late February or early March for construction start. More than 90 percent of our projects have hit their completion dates. The guys have been able to work to make up days. Grand openings are my favorite day. We throw good parties. That’s the favorite day of all of our projects. That and the day they cash flow.

How many permanent jobs are you forecasting?
One per room — that’s how we figure it. That’s not my expertise, more of Robert Allen’s. (Robert J. Allen is vice president of operations.) I build them; he runs them.

Do you have a picture in your mind of what the Downtown looks like after the hotel and apartments have been open?
It will add nightlife. The one thing I’ve seen: if there’s not a concert or game going on, the Downtown is quiet. I think we’re going to add people to the street at night. I think it’s going to add other things to be built. You guys started it with the Ford Center. It’s a hell of an arena. I’ve told people all over about it. It’s a good jumpstart for a Downtown. You’ve got city hall down there, and the banks, the casino, and all the different businesses — Fortune 500 businesses there. There’s a lot to offer.

We can’t wait to get it off the ground. I think the political side is over. Now the real work starts.

For more information on HCW LLC and its developments, including Evansville’s project, visit www.hcwdevelopment.com.

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