The city of Carmel, Indiana government likes to spend money. The city is nice, but it also has a massive debt from all their buildup. Some reports have their city debt pegged at $1 Billion. In 2017, they announced the redevelopment commission was helping build a new pristine hotel, Hotel Carmichael.
In June, 2019, there was an update of the progress and everything looked to be going as planned, construction and cost wise:
“As is the case for most construction projects – whether it be a new building or a road project – those early estimates often change. In this case, the early estimate was made before the architects really started their work,” Mestetsky said. “Now, nearly three years later, we know more about the various costs and so we are making sure we have enough financed to ensure this hotel is built to the architectural standards of our other magnificent buildings
Mestetsky said the tariffs haven’t been a “major factor.”
“We have certainly seen the price of materials fluctuate (mostly increase) as contractors deal with what they perceive as tariff-related costs,” he said. “Most increases in material and labor costs in the market are the result of a nationwide building boom.”
News released by 93.1 WIBC, present day, now shows the project is now $18 Million over budget (45%). Cost overruns are now being blamed:
As reported by Gerry Dick at Inside Indiana Business, “The Hotel Carmichael is scheduled to open in May with a new estimated cost of $58.5 million, about $20 million higher than initial estimates.”
The city of Carmel cited “a variety of economic factors” in addressing the cost overruns, including a national increase in construction costs and local spikes in labor costs and tariffs on imported materials and goods.
“The same factors that have led to a building boom across the nation, state and the City of Carmel itself have unfortunately also led to increases in costs of materials and labor that have impacted the hotel,” said Henry Mestetsky, executive director of the Carmel Redevelopment Commission. “As we tracked these construction cost increases reported by various construction-related sources, we anticipated the challenge.”
The Indianapolis Star reported Monday that Carmel Redevelopment Commission executive director Henry Mestetsky was aware of the multi-million increase in the budget for the construction of the hotel for nearly a year, but didn’t disclose it to the city council until just last week.