Speedway Town Council to introduce ordinance authorizing short-term loan to complete hotel development

$2.5 million loan to be repaid to the Town with interest


The Speedway Town Council announced today that it will introduce an ordinance at its meeting tonight that authorizes the Town to issue a $2.5 million short-term loan to HE Speedway Owner, LLC to bring the Wilshaw Hotel, a Hilton Tapestry development in the heart of Speedway, one step closer to completion.

The Town’s proposed short-term loan originates through Tax Increment Finance revenue. HE Speedway Owner LLC is expected to repay the Town within three years, at market or near-market rates.

“The current economic climate with inflation, rising interest rates, and higher costs due to supply chain disruptions poses a unique set of challenges across all market sectors, including hospitality and tourism,” said Speedway Town Manager Grant Kleinhenz. “This short-term loan is a creative financing tool to build this hotel, which we believe continues to be the highest and best use for this site.”

Completion of the project will be in the hands of HE Speedway Owner LLC, a new ownership group managed by 33 Degrees and Hotel Equities. 33 Degrees is an integrated management platform combining market knowledge and industry experience across a broad range of commercial real estate assets. An affiliate of 33 Degrees, Hotel Equities is leading the development of the Wishaw Hotel. Hotel Equities currently leads a portfolio of more than 210 hotels in the US and Canada, including ten in Indiana.

33 Degrees and Hotel Equities already have made significant progress in getting the $30 million hotel development on track. In 2022, 33 Degrees, Hotel Equities and its partners invested not only extensive time and resources, but also $5 million of their own capital to meet outstanding debts and obligations to the original project. This work also included engaging independent inspectors to inspect the site. The site’s structural integrity is intact and will be shovel-ready when financing closes.

Following the ordinance’s introduction at the Feb. 27 meeting, the ordinance will be considered for second reading at the Town Council’s March 13, 2023 meeting. If the ordinance is approved by the Town Council, the Town and HE Speedway Owner, LLC will enter into a loan agreement contingent upon HE Speedway Owner, LLC obtaining their outside financing. Once HE Speedway Owner, LLC closes on their outside financing for the development, construction is anticipated to begin at the site.

“We appreciate the thoughtful approach that Hotel Equities has taken to developing this hotel and their significant investments which have gotten us to this point,” Kleinhenz continued. “At completion, this hotel will leverage the town’s strategic upgrades and improvements to Main Street, as well as the recent improvements that the Indianapolis Motor Speedway has made to its premier venue. A hotel at that site promises to boost tourism opportunities beyond the month of May, right in the heart of Speedway.”