The Indianapolis Capital Improvements Board voted to authorize up to $70 million from the board's fund balance to cover remaining buyout costs and anticipated change orders for the Signia hotel and convention center project, a board member said during the meeting. The city has agreed to share 14% of net hotel revenue (after debt service) and 14% of net proceeds of any future sale, reflecting the board's proportional contribution to construction costs.

Board leaders described the funding request as a response to recently higher-than-expected prices in mechanical, electrical and plumbing trades and tight contractor capacity across the region. The board approved the measure by roll call; the vote was recorded in favor and the resolution passed.

Board members said the request stems from a buyout phase in which subcontract scopes were priced after the bonds were sold. Presenters estimated the anticipated overage on MEP and related scopes would be roughly in the mid-$60 million range; the board approved up to $70 million to provide a margin for additional change orders and integration costs. The presenter said the requested funding will allow the contractor to be paid and work to proceed without further delay as the building rises.

Construction status and rationale: project team representatives reported the Signia block is about 15 stories above grade and roughly 25% to 30% complete by spending measure. They said the team has used about 15 weather days so far and is beginning to pour decks above the ballrooms and to frame those spaces. Because several large downtown projects are building concurrently, board staff said bidding and subcontractor availability have been constrained, increasing prices for MEP trades used heavily by hospitals, hotels and manufacturing facilities.

Financial terms and projections: as part of the funding arrangement, the city agreed to allocate the board 14% of net hotel revenue after debt service and 14% of net sale proceeds after any defeasance. Presenters included a pro forma that showed net revenue projections averaging about $37 million annually over the first 15 years, with first-year net revenue roughly $20 million and longer-term growth to the mid-$50 millions in later years under the forecast used in the materials. The board's contribution does not change its legal liability on existing bonds, the presenter said.

Next steps and oversight: board members asked for continued updates as the buyout and contractor negotiations conclude. Staff said they will return with specific contract change orders and will monitor the MEP buyouts closely; any future adjustments beyond the approved amount would come back to the board.

Ending: Board members framed the decision as a way to keep a major downtown project on schedule and protect the board's long-term revenue prospects, noting the sooner construction finishes the sooner the project can generate revenue to service debt and contribute to downtown economic activity.