Terre Haute House

Demolition of the north wing; December 2005

The Terre Haute House was a historic former hotel located in downtown Terre Haute, Indiana, USA, that was demolished despite numerous efforts to preserve it. The hotel was replaced by a Hilton Garden Inn, opened in 2007.

Overview

Since being closed in 1970, the Terre Haute House was considered by some as a faded reminder of Terre Haute's somewhat sordid past as a midwestern “Sin City” and, in the years since its closure, it came to be viewed by some in the city as an impediment to downtown revitalization, but it was not always looked upon with such scorn — it was once the social center of the city, the site of numerous formal dances, conventions, parties and other events.

The Renaissance Revival-style 10-story building, located on the northeast corner of Seventh Street and Wabash Avenue (U.S. Highway 40), was the pinnacle of high-class accommodations in its heyday, from the 1920s to the 1950s, a time when Terre Haute's well-known illegal gambling operations and other businesses of ill repute brought the highest of the high rollers to town.

From Prairie House to Terre Haute House

The first Terre Haute House was built by prominent early Terre Hautean Chauncey Rose, who called it “The Prairie House” because it was located “in the prairie” several blocks east of the village. Rose operated this original hotel from 1838 to 1841. When federal funding for continued construction of the National Road dried up in 1840 and the U.S. Army Corps of Engineers, who supervised construction of the highway, departed the community, the hotel was closed. In the meantime, historical information seems to indicate that the hotel was turned into a boarding house.

With the anticipated opening of the Wabash and Erie Canal at Terre Haute in 1849, Rose reopened the hotel that year and, in 1855, renamed it “The Terre Haute House.” He also added a fourth floor of guest rooms at that time.

Rose, who by 1866 was tired of the hotel business, considered donating the property for educational purposes. This didn't sit well with some members of the local business community, so they formed the Terre Haute Hotel Co. and purchased the Terre Haute House from Rose.

Two more ownership changes transpired in the 1870s. In late 1888, Charles Baur, brother of Jacob Baur, founder of Liquid Carbonics Manufacturing Company which managed the hotel after the second Terre Haute Hotel Company acquired it from the Estate of William Tuell in March 1888, leased the hotel.

Eventually, Crawford Fairbanks purchased the hotel and property, and promised to demolish the existing structure and build a new hotel — on a much grander scale — on the site. It would be left to his heirs, however, to see this promise through to its completion following Fairbanks' death in 1924. Although the decision was made to go ahead with the project in 1925, work would not begin until early 1927.

Following the demolition of the old hotel, work began on the new Terre Haute House in the spring of 1927. It opened on July 2, 1928 to great fanfare and high hopes. Fred & Harry Van Orman, Inc., a Chicago-based hotel management company owned at the time by E.L. Wenzel, took over the new hotel's operations and Wenzel himself became the new Terre Haute House's manager.

Al Capone slept here

During the old hotel's long existence and the new hotel's early years, the country's rich, famous and infamous were frequent guests. Rumored to be among the infamous to take advantage of the city's finest in hotels was a Chicago resident by the name of Al Capone. With a thriving red light district during those years (though modest compared to the activity which existed in the first two decades of the 20th century), Terre Haute had gambling and prostitution operations that were attractive to visitors of Capone's “caliber.” A biography of Benjamin “Scatman” Crothers seems to be the source of the story that Capone stayed in Terre Haute, but this can neither be confirmed nor denied.

It has also been said that the infamous bank robber John Dillinger stayed at the Terre Haute House, although there are some who dispute this. Dillinger supposedly had a deal with local police so they would leave him alone, but this, too, cannot be confirmed.

Downtown's decline doesn't spare the House

The vice that for so many years had run rampant in Terre Haute was on the way out by the time Terre Haute businessman and Indianapolis Motor Speedway owner Tony Hulman purchased the hotel along with the Terre Haute House Garage and Terre Haute Opera House in 1959. Hulman, whose fortune was made in his family's distillery, wholesale grocery and baking powder businesses, radio and TV stations, utility companies, and the Indianapolis Motor Speedway, wanted to breathe new life into the old hotel. He'd proven time and again that with careful investment, good stewardship, and solid advertising, he could turn a profit from virtually any entity he touched.

But not even the man with the seemingly golden touch could stave off the inevitable for long. Whether Hulman or anyone else knew it or not, the grand old hotel's glory days as the centerpiece of downtown were coming to an end by the early 1960s.

When construction started on Interstate 70 along Terre Haute's south side, more and more stores and other businesses found that part of town to be far more accessible and inviting than downtown. More modern hotels and motels sprang up in that area along U.S. 41, including a large Holiday Inn that opened in 1962. With all of this competition, Terre Haute's downtown area, like so many others across the country, spiraled into a rapid decline.

The Terre Haute House was not spared the indignities of this decline. The old hotel lost much of its business to the newer hotels and motels, and when the traveling public stopped coming with their former regularity, the hotel became unprofitable. “Unprofitable” was not a word Tony Hulman liked to hear, but, according to the late Richard Van Allen, who managed the hotel at the time, Hulman did try to keep the hotel open despite the fact that he lost a great deal of money in doing so. Van Allen told the “Tribune-Star” in 1997 that, toward the end, Hulman sold food at cost and allowed local civic groups to meet in the hotel for free, just to keep people coming in.

But it was all for naught.

On June 18, 1970, Van Allen gathered the hotel staff in the Prairie Room and informed them that the Terre Haute House would close within two weeks. Exactly 42 years and two days after it opened, the Terre Haute House closed to guests on July 4, 1970.

Even though the hotel closed, several businesses remained in the building following its closure, evidently in hopes that the hotel would eventually reopen. When that didn't happen, the tenants simply went out of business or moved elsewhere. The last holdout, World Wide Travel Service, moved out of the hotel to a location on Ohio Street (one block south of the hotel) in the fall of 1980.

Numerous attempts at revival fail, but not for a lack of trying

In the 35 years between the Terre Haute House's closing and the start of demolition, numerous developers — along with at least two Terre Haute mayors — advanced plans to either renovate and reopen the hotel or demolish it and redevelop the land. Much to the chagrin of local residents, nothing ever got off the ground, and some residents and, most notably, a number of city officials eventually came to see the dilapidated hotel as the ultimate symbol of downtown Terre Haute's stagnation.

In March 1984, then-Terre Haute mayor P. Pete Chalos threatened to condemn the hotel property in an attempt to force the Hulman family into selling it. This didn't work, but it did seem to spur interest among developers, who began working in earnest to put plans together to restore and reopen the old hotel.

Over the decade that followed Chalos' threat, redevelopment plans were advanced and then withdrawn, in what seemed to be a perpetual cycle of hopes raised and then dashed. Perhaps the most serious proposal was offered in the mid-1990s. At Chalos' urging, the Walden Group, led by Texas developer Don Daseke, who had developed an attractive hotel on the campus of Depauw University in Greencastle, Indiana, put together what was, by most accounts, a very attractive package that would have returned the Terre Haute House to its original use as a luxury hotel, making it a convention destination under the Radisson banner.

Daseke managed to sign a purchase agreement with the Hulman family for the hotel in the summer of 1995, and Radisson signed on early the next year. All of his plans were contingent upon financing, however. Despite the fact local banks in Terre Haute were not and could not be convinced that it would work, they had reached the point where they had essentially decided to give a green light to the project, fully expecting that Daske would end up filing bankruptcy and, perhaps, the subsequent operator, before the operation would stabilize. One board member of one of the biggest banks involved, however, insisted that the underwriting requirements be imposed that Daseke would later call “onerous.” Daseke pulled out of the project in January 1997, citing the banks' intractability.

The board member who changed the course of the Daseke project was none other than Greg Gibson, whose family, at the time, owned the only full service hotel in the downtown area, the Larry Bird's "Boston Connection" (which is now a Days Inn with no connection to Bird). Terre Haute First National Bank had decided, despite some reservations, to fund the Daseke project. When bank board member Gibson learned of the bank's intention he successfully blocked it to protect his interest in the Boston Connection.

Another group of potential investors, with Daseke on board, then turned to a proposal that would have converted the hotel into senior citizen housing. This, too, fell by the wayside.

Later that year, in an interview with the Tribune-Star for a special series of articles on the Hulman family, Tony George, Tony Hulman's grandson and the face of today's Hulman family empire, damned the Terre Haute House with faint praise while basically reiterating the family's indifference toward the old hotel. “I think architecturally it's significant, historically it's significant and it would be really nice to see it somehow evolve to be part of the downtown again,” he said. “I just don't think that we are in any position to develop it ourselves, given everything else that's going on. If no one develops it, we'll probably demolish it.”

In 2002, following Tony George’s pronouncement regarding his general disinterest in the Terre Haute House John R. Bischoff met with Hulman officials Jeff Belskus, Curt Brighton and Fred Nation and convinced them to consider one last effort to renovate the property.

Bischoff, along with local attorney C. Joseph Anderson and Charles Faust of Summit Hotel Management formed Haute Maison Development LLC for that purpose.

Haute Maison struck a deal with Marriott Corporation. HNTB became the architect of record and F. A. Wilhelm was selected to renovate the structure.

Complicating effort to fund the project was the fact that Mayor Judy Anderson, in office at the beginning of Haute Maison’s effort, was sister-in-law of Haute Maison partner C. Joseph Anderson.

Anderson was already under attack for choosing one of her sons to serve as her administrative assistant and for granting another son a city sidewalk contract. Many political observers believe such decisions significantly contributed to her defeat by Kevin Burke in the May 2003 mayoral primary.

By the time Burke took office Haute Maison had secured the necessary funding commitments in the form of syndication of Historic Tax Credits, New Markets Tax Credits and certain state credits. Essentially all funding, including the mortgage funding was to come from out of town sources.

Bischoff and Anderson met with Burke, not to obtain any form of city financial support, but to ask him to refrain from seeking to block their effort. In response, Burke later attended an Urban Enterprise Association meeting in which he warned the membership against providing the project $250,000 in assistance it had promised the developers.

Later a legal representative of the developer’s New Market Tax Credit funding source came to town simply to determine that the city was receptive to the development. Burke, through his representative successfully soured the representative on investment in the city. He had many other cities seeking such investment and willing to contribute their fair share.

Burke successfully blocked all other efforts to renovate the building by convincing the buildings owners to allow the city to take control and create and publish a request for proposals for the structure.

Attorneys for both building owner and the city drafted the RFP. The RFP specified that no city assistance would be provided and $1,000,000 in assistance previously promised to prospective developers by the property owner would not now be available.

All responses to the RFP were rejected and the project and several million dollars in public assistance and unspecified incentives provided by the property owner were made available to Greg Gibson, who did not present a proposal in response to the RFP.

When Kevin Burke was elected mayor of Terre Haute in 2003, he promised to decide the issue once and for all — Burke's campaign platform had included tearing down the Terre Haute House from the early days of his mayoral run. Once elected, Burke's administration obtained an option to purchase the property from the Hulman family in October 2004.

In January 2005, the city's Department of Redevelopment put out a request for proposals for rehabilitating the old hotel and other historic buildings on the property or redeveloping the site. On May 25, 2005, the committee overseeing the process announced that none of the four rehab proposals met the city's stated financial criteria and thus the project was back at square one once again. The city's purchase option expired the following month, leaving the hotel's future once again in limbo.

After 35 years, is the story finally over?

In September 2005, the Terre Haute Tribune-Star newspaper reported that an agreement had been reached between a new local limited liability corporation, Seventh & Wabash, LLC, and Terre Haute Realty Corporation (the Hulman family's real-estate holding company, which managed the Terre Haute House and several of the family's other properties). Seventh & Wabash, owned by local businessman Greg Gibson, would purchase the Terre Haute House, the Bement-Rea Building and the former Fort Harrison Savings & Loan (the buildings were all on the same block). No sale price was immediately announced, leading some to wonder how much the Hulman family stood to make from the deal.

Rumors began to swirl following the sale announcement that all three buildings would be demolished; this news did not encourage local residents who had hoped to someday see the hotel and neighboring buildings returned to their former splendor. Fred Nation, a spokesman for the Hulman family, initially denied reports that the Terre Haute House would be demolished. That was the family's official line when news of the impending sale first broke, but it soon became obvious that the end was near.

Dennis Trucking and Excavation, a company also owned by Gibson, began removing asbestos and other hazardous materials from the site in mid-September 2005. Permit applications filed with the Indiana Department of Environmental Management (IDEM) indicated that the removal was "to facilitate demolition". So much for the denials!

On September 15, Gibson told the Tribune-Star in an interview that the language of the IDEM permit application was correct. The Terre Haute House was going to be coming down — and quickly. "We think we can get the demolition done in about 120 days," Gibson told the newspaper. "It's a very aggressive demolition schedule."

The question of the sale price of the property was finally answered when the Tribune-Star reported in its September 29, 2005, edition that the three buildings were sold by Terre Haute Realty Corp. to Seventh & Wabash for $1, but, according to filings with the Vigo County auditor, in the end it was the Hulmans who paid Gibson — rather than the other way around — in the form of a "development fee", just to take the property off their hands. The amount of this fee was not stated and, given the Hulman heirs' penchant for privacy in their business dealings, it may never be revealed publicly. Nation, once again speaking for the Hulman family, would say only that "clearly the property sold has a negative value and the sale terms reflect that."

As Gibson and the Hulmans hashed out the details of their deal, Terre Haute developer John Bischoff (who had worked to raise funds to restore the building, beginning in 2001 after signing a Memorandum of Understanding with the city and Hulman interests and whose "Haute Maison" group had submitted one of the most recent proposals for the site after the city had obtained its purchase option) protested the asbestos removal, calling it unsafe for those in the area around the hotel site. Bischoff was quoted by the Tribune-Star as saying that he and others who were interested in saving the Terre Haute House "(would) make it as painful as possible" for Gibson and, when asked if that could include lawsuits, he replied, "Yes, whatever we can do."

Bischoff and his group did not get the chance to file a lawsuit prior to commencement of demolition. Bischoff did, though, file a Tort Claim Notice with the City of Terre Haute, dated December 15, 2005, a filing required under Indiana law to allow him to pursue litigation against the city in the future. In the present of the winter of 2005, however, demolition began almost immediately after the ink dried on the contracts.

Demolition starts in earnest

Initial demolition of the hotel began during the last week of September 2005, when excavators ripped away the attached two-story section at the rear of the hotel (which contained the Mayflower Ballroom). This section was chosen as the starting point because it allowed crews more room to bring in the equipment needed to demolish the 10-story main portion of the hotel.

Workers erected plywood barrier walls along Seventh Street and Wabash Avenue to keep passers-by away from the hotel during demolition preparations. This was done in part because of fears that portions of the exterior were in danger of collapse. These fears were not totally without merit, as a portion of the brick façade on the east side of the hotel had broken loose in July 2005, falling to the roof of the Mayflower Ballroom.

The neighboring Bement-Rea Building (which housed a noted local tavern, T's Lounge, until its closure at the end of October 2005) and former Fort Harrison Savings & Loan were demolished along with the Terre Haute House, although some (but not all) historically significant items were removed from the buildings prior to their demise.

Neighbors' concerns about implosion, plus cost, lead to a change in plans

As the asbestos-removal portion of the demolition entered its final days in early October 2005, Dennis Trucking's John Hanley III told the Tribune-Star that implosion looked like the obvious choice for bringing down the Terre Haute House. However, the owners and tenants of nearby buildings, many of which are also in the Wabash Avenue East National Register Historic District, expressed concern that blowing up the 10-story tower could severely damage or even destroy their homes and places of business.

On October 20, 2005, Terre Haute television station WTWO reported that asbestos removal was complete and that a final decision would be announced on the demolition method within a week.

Wabash Avenue-East Historic District, Wabash Ave. and 7th and 8th Sts.; also 26-34 8th St.; also roughly bounded by 6th, Ohio, 7th, and Walnut Sts. Terre Haute

The following week, the Tribune-Star reported that the decision, as promised, had been made. Crews would knock down the Terre Haute House with a crane and wrecking ball. Workers took to the roof to remove clay roofing tiles from the highest part of the doomed building to avoid the possibility that they could cause personal harm or property damage by falling on automobiles or passers-by.

As of early November 2005, reports from the various Terre Haute media outlets indicated that the entire demolition project would be completed by the end of January 2006. It did not take that long. Swift progress was made, with the crane operator telling a Tribune-Star reporter that, while some parts of the building were solid enough, he thought other parts came down almost too easily when hit with his 6,000 pound wrecking ball. The last remaining portion of the old hotel's façade, the lower floors of southwest corner, was demolished on December 28, 2005, bringing the Terre Haute House's nearly 78-year life to a close.

The Terre Haute House is dead; long live the Terre Haute House!

Once the demolition of the old Terre Haute House kicked into high gear, some Terre Haute residents began to voice concerns that the former hotel property would become just another vacant lot. However, it soon became clear that the property would not stay empty for long.

On November 10, 2005, the Tribune-Star reported that Dora Hotel Company, LLC., based in Fishers, Indiana, would develop a new, 109-room hotel on the site of the old Terre Haute House. Details are still being worked out, but if all goes according to the initial plan, construction will begin in the spring of 2006, with the new hotel opening to guests sometime in the summer of 2007.

Dubbed the Hilton Garden Inn Terre Haute House, the new hotel's architecture may be reminiscent of downtown Terre Haute's historic buildings, but with a style all its own. The stone pediment etched with the words "TERRE HAUTE HOUSE" from the Seventh Street side of the old hotel will be used over the entrance to the new six-story structure, and some other items may also be utilized. The Dora's emphasize, however, that their new hotel will be thoroughly modern.

Plans for the new hotel call for four luxury suites, a heated indoor pool, high-speed internet service, convention and meeting space and many other amenities, all of which are demanded by today's hotel guests. The new hotel is intended to cater to the business traveler, and it is hoped that its close proximity to Indiana State University and ISU's Hulman Center multipurpose arena, as well as Rose-Hulman Institute of Technology and a host of tourist destinations, will provide a steady stream of guests.

Mayor Burke called the announcement “exhilarating news,” and added that he had heard something was in the works. He also stated that one of his goals once the old Terre Haute House was gone was for something to happen quickly on the site.

Salvaging some things, landfilling the balance

Many local residents were appalled by the demolition of the Terre Haute House, but with the end in sight, efforts turned to saving as much of what was inside the buildings as possible. Having been largely empty for more than 35 years, much of the interior and exterior of the Terre Haute House were, not surprisingly, in an advanced state of decay. Greg Gibson, the new owner, and the demolition team worked with the Vigo County Historical Society and other interested parties to save some historically significant items within the hotel and neighboring buildings.

Here is a list of what was removed:

Terre Haute House Cutler Mail Chute Box as removed
Terre Haute House Cutler Mail Chute Box Restored

It also appears that many other valuable and historically significant items were destroyed with the hotel. Each room contained a cast iron radiator and a bathroom with a glass-shelved medicine cabinet, a porcelain pedestal-type sink, a porcelain tub, and a Starr Brown bottle opener with corkscrew. Shell-shaped glass light fixtures adorned the bathrooms, and square glass fixtures were still present in the bedrooms. Hundreds of varnished hardwood doors, a lobby full of solid walnut paneling and lots of marble were also mixed with the rubble. The basement still contained cooking utensils, china, pots, pans, and machinery at the time of demolition. An antique drill press and other tools were still present in the basement, as well as keys to all of the rooms.

Could this hotel have been saved?

The hotel's location in sleepy downtown Terre Haute, coupled with the deterioration of the old building, gave many local government and business community pause when considering proposals to restore the landmark hotel. As restoration cost estimates continued to climb over the years, the willingness of the Terre Haute House's owners (the Hulman family) to work with would-be restorers faded.

And while its façade was beginning to crumble, the structure of the Terre Haute House itself seems to have been very sound. The concrete and steel superstructure would have lent themselves well to restoration and upgrading, but with many interior surfaces damaged by decades of water infiltration, any such effort would have been a costly proposition.

In addition to the damage brought on by the water infiltration, other factors would surely have inflated the cost of any restoration. Recall that the hotel was built more than 75 years ago. In the three-quarters of a century since that time, construction, plumbing and electrical codes have been updated many times over. Also, the Americans with Disabilities Act requires certain accessibility provisions be made for those with physical limitations.

The ADA requirements alone would have proven difficult to satisfy, given the hotel's general layout. Add to that the fact that any one of the other demands of compliance with the various building codes would have pushed the price of restoration significantly higher, and it becomes somewhat easier to understand why the hotel was not restored.

In the end, though, political pressure to demolish the old hotel - which was dubbed by Mayor Burke in 2003 “an impediment to downtown revitalization” — ultimately proved to be the final blow for the Terre Haute House. Although reuse advocates still maintain that the 1927 Terre Haute House was a great candidate for restoration (despite the cost), each swing of the 6,000-pound wrecking ball that reduced the landmark to rubble in the winter of 2005 punctuated the decision of local government and business leaders to close the door forever on that possibility.

In the very same year Terre Haute officials chose to demolish the city’s landmark hotel, the city fathers of Oklahoma City decided to save theirs. The Skirvin Hotel, built in downtown Oklahoma City in 1910, in 1988 succumbed to the same societal changes and resulting economic realities that closed the Terre Haute House for good.

Developers spent $56.4 million to reopen the Skirvin as a 225-room hotel. About $18 million of the funding came in the form of public assistance.

Various developers in Terre Haute came forth with proposals to renovate its famous hotel. These developers sought only $1,000,000 in assistance, either from the public sector or the Hulman family, which had in the past pledged that much to such a project. One such proposal estimated renovation costs at $20,000,000 to reopen the structure as a 138-unit Marriott by Courtyard.

Terre Haute officials published its Request for Proposals on October 14, 2004, but withheld all forms of public support for any project involving renovation of the existing structure.

There is no real question as to whether the project could have been funded, or if the old hotel could have been restored to become one of the finest hotels in the state. Given essentially the same circumstances Oklahoma did it.

Notable people in the history of the Terre Haute House

Hundreds of thousands? Millions?

If the company had indeed spent hundreds of thousands of dollars "to maintain the building", as Nation suggested, in 1997 it was certainly hard to see where the money went. By the time the hotel was sold and demolished in 2005, it was harder still. Pre-demolition photos from inside and outside the hotel indicate that little — if anything — had been “maintained” since the last business moved out in 1980, if not before.

One thing that did happen sometime in the hotel's last three years before its demolition was a property tax reassessment. Indiana's property tax assessment system, which had been predicated on the replacement cost of a particular property, was ruled unconstitutional in 1998. This led to a major overhaul of the system in 2001, with taxes to be determined by the market value of a property. The net effect of the change was that property taxes in most areas of the state skyrocketed. Just the opposite happened to the Terre Haute House, however. In 2003, its assessed value was lowered to $62,000, most likely because of its poor condition as evaluated during its reassessment, although the reasons are not clear and likely never will be. The net result was that, while many Hoosier taxpayers had to dig deep to pay their higher property taxes on their homes and businesses, the Hulman-George family saved about $60,000 in taxes over the years 2003 through 2005.

Property taxes paid to Vigo County on the Terre Haute House property at 700 Wabash Avenue:

(NOTE: It is not clear if these figures include Terre Haute city property taxes or any other levies.)

External links

Coordinates: 39°28′00″N 87°24′24″W / 39.4667°N 87.4067°W / 39.4667; -87.4067

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