Columbia leaders deny being ‘wined and dined’ by downtown hotel developer
The city of Columbia Tuesday moved forward a deal to sell a large piece of downtown property to Orlando-based hotelier Kessler Enterprise for $2.9 million in exchange for the redevelopment of the site into a 4-star, full-service Grand Bohemian hotel on Main Street.
Some have raised questions about why the city chose Kessler, when other developers offered more money for the office building at the corner of Main and Washington streets, called Washington Square.
Rick Patel, who has redeveloped several Columbia properties into hotels including the recently-opened Moxy hotel at 1200 Main St., raised the question at Tuesday’s council meeting.
Patel said he offered $5 million for the 7-story, 94,000-square-foot Washington Square property, which the city listed for sale in October with the intention of it being redeveloped into a hotel.
“This is not right for the taxpayers of the city of Columbia, losing this kind of money,” Patel said at the meeting.
City Manager Teresa Wilson said Patel’s was not the highest dollar amount offered for the property, but she would not say what the highest offer was.
Wilson, along with multiple members of City Council, told The State that while Kessler’s offer was not the highest dollar amount, they believe the company’s proposal will have the most transformative impact for the city.
Because the city listed the properties through a private broker, Trinity Partners, it was not obligated to choose the highest bidder, Wilson said. The city chose to list the properties that way to give leaders more flexibility in deciding what proposals would most benefit the city, beyond making the choice just based on the sale price, she added.
“We’ll continue to probably do that for some of these monumental transactions and sales of property, because we want to see what the market will do,” Wilson said.
Kessler plans to invest $70 million into the site. Once finalized, Kessler will pay $2.9 million for the property and receive $400,000 back from the city to make building upgrades that city leaders said would have been paid for by the city anyway if it remained the property owner.
The Kessler project will be Columbia’s first luxury four-star hotel, and the company’s 12th “Grand Bohemian” hotel, which include museum-quality art, “cultural programming” and entertainment options that leaders say separate it from the other offers on the table.
The State has requested the full list of offers made for the property through a public records request.
Beyond the claim that the city is losing money on the hotel deal, critics have also questioned a city retreat held at a Kessler property in Savannah earlier this month, claiming Kessler “wined and dined” city leaders. Wilson and members of City Council denied that claim.
Were city leaders “wined and dined” before hotel deal?
City Council held an economic development retreat Dec. 7-8 at Kessler’s JW Marriott Savannah Plant Riverside District hotel. Several members of city staff and some members of City Council including Mayor Daniel Rickenmann stayed overnight at the JW Marriott in Savannah between Dec. 7 and 8, and the stays were paid for by the city, not Kessler, Wilson said.
Rickenmann was travelling Wednesday and was not available for an interview, according to an aide in his office.
The State has also submitted a public records request for the itinerary and expenses associated with that retreat.
The location for the retreat was selected by Wilson, not by any member of City Council, she said. The intention of the trip was to give Council members an opportunity to see a Kessler property in action, as well as to see how the city of Savannah has utilized its riverfront, which is a booming commercial district in the Georgia city.
Council members Tyler Bailey and Peter Brown both said Kessler did not pay for anything during the retreat that they are aware of, and that they both drove themselves to Savannah Monday Dec. 8, and drove back after the day’s meetings.
“I wasn’t wined and dined,” Bailey said. “I didn’t get a glass of wine, I didn’t get a glass of champagne, I was not wined and dined.”
Several members of city staff attended that retreat, which Wilson said was important to give staff involved in economic development and real estate matters a chance “to learn and be immersed in the environment,” as well as an opportunity for several Council members to see a Kessler project firsthand.
“Kessler … has a lot of properties down there, and it’s really to see the product,” Bailey said. “That’s what it was all about, looking at it, looking at the product, looking at what could be.”
Brown, too, pushed back on the claim that Kessler “wined and dined” city leaders to influence their decision.
“This is all rumor, hearsay,” Brown said, adding that the city’s choice was not based on what would make the most money, but what could bring the highest impact to Columbia.
“We’re not a profit and loss center … our charge is to do what’s right for the people of Columbia and to get the most positive out of everything that we do,” he said.
Vote to sell property comes after Savannah retreat at a Kessler property
A portion of the retreat included a meeting held in executive session, which is not open to the public. The city provided notice for the meeting and the executive session on its website. Wilson said city council does not need to hold a formal vote when directing city staff to negotiate contracts.
“Because it’s a contract negotiation, we have to do it in a privileged manner until we get to those final negotiations and a contract, and then it becomes public,” Wilson said.
Bailey and Brown both said they believe the process has been as transparent as possible.
“I think executive session has a vital governmental function, and I think that everything has been completely transparent,” Bailey said, adding that city council still must cast a second vote on the deal before it’s final.
The city listed Washington Square for sale along with a property at the corner of Bull & Taylor streets in early October, with the intention that the properties would be redeveloped into a hotel and apartments and/or retail space.
City leaders first shared their intention to offload several city-owned properties during a December 2023 press conference held to announce plans for a new police headquarters at the former Aflac office building on Laurel street.
During that press conference, Columbia leaders said they plan to sell 13 city-owned properties including 1 Justice Square and the police department’s Metro Region Headquarters at 1800 Main St.
Washington Square and the Taylor and Bull streets properties were the first to be listed.
Kessler has been in discussions about potential Columbia projects for years, even before Washington Square was listed, Brown said. Ultimately, the recommendation to choose Kessler for this project came from city staff, Wilson said.
“We as staff thought that the best fit was to move forward with the Kessler Collection,” she said. “And (then) do … the tour and educate ourselves firsthand on what the properties look like in Savannah.”
Wilson added that Kessler had verbally expressed interest in the Main Street site at least twice by the time of the retreat.
Part of the appeal of the Kessler proposal for City Council members was that the company has already built numerous luxury hotels across the country, with a particular focus on the Southeast.
“We’re looking at this actually from less of a local view as well. We’re looking at things from a regional, national view of how we move Columbia forward,” Brown said, adding “this isn’t about being wined and dined,” but about establishing a “very sought after” company in the capital city.
City Council is expected to take its second vote on the deal Jan. 6.
