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Hotel owners say Pan Am Plaza project would 'saturate the market' with rooms

They're urging the Capitol Improvement Board to reset and start over.

INDIANAPOLIS (WTHR) - A group of hotel owners says the new hotel planned for Pan Am Plaza is too big and will saturate the market.

They're urging the Capitol Improvement Board to reset and start over.

At issue is the Kite Realty project chosen last fall. It calls for two Hilton-brand hotels at Pan Am Plaza with more than 1,400 plus a ballroom and meeting space.

Tourism officials said the city needs considerably more rooms to keep conventions and draw new ones.

But Bruce White, who developed the JW Marriott, told the CIB a study his group commissioned shows 1,400 rooms is way too many, and adding them all at once will hurt existing hotels.

"We're concerned about the 38% growth in supply which is extraordinary, as far as I know unprecedented in the United States and the impact that would have on decreased hotel value," White said.

"At the end of the day, we're risking losing major customers, GenCon, FFA, if we don't have enough hotel space which they asked for," said Melina Kennedy, CIB President.

Funding for the project is contingent on the CIB getting a larger share of hospitality tax dollars collected by the state.

That added revenue would also go toward keeping the Pacers here for another 25 years and help the Indy Eleven build a soccer stadium.

The move requires state lawmakers to sign off. It's currently in committee.