Your guess is as good as mine. I assume there was some hope that it would be rehabbed early on, but once the water burst and flooded the top floors it probably should have been over. There's no need for a hotel there anymore.
The only thing I can assume is someone had their eye on it for niggerboxes long before it was announced.
Kern might know what they have planned and is just delaying it because he hates niggers.