Oct. 09–The owner of the DoubleTree by Hilton will have to wait a few months before the city considers his request for tax breaks to build a new Downtown hotel.
Consultants will review the proposal before city development staff makes a recommendation to the City Council.
“The consultant will tell us what the occupancy rate would be, what the rate per night would be, what the construction costs are, what the management costs are,” said Mathew McElroy, director of the City Development Department. “If there’s a gap, a need, that’s where the city would participate.”
The City Council on Tuesday took no action on the proposal by attorney and businessman Jim Scherr, who is asking for $3 million in city tax rebates to build a $17 million Courtyard by Marriott Hotel next to the DoubleTree.
McElroy said it would take up to 45 days for consultants to complete their study, at which time a recommendation will be made to the council.
“If there’s no gap, that’s when there’s no municipal role for an incentive package,” McElroy said. “But we don’t know that yet either way. We have to go through this process to find out.”
City Rep. Cortney Niland praised Scherr for the success of the DoubleTree, calling it a catalyst for Downtown development. But, she said, city staff hasn’t had the time to evaluate his proposal and recommend whether an incentive package should be offered.
Mayor Oscar Leeser agreed.
“It took three years for him to develop the plan, and now for us to come in here in five minutes and make a determination is a little tough,” Leeser said. “We just want time for staff to look at it, analyze it and make a recommendation.”
Scherr said he was disappointed that no action was taken on Tuesday, but was glad the proposal isn’t off the table.
“If the proposal works for us to be able to accomplish this project, yes, I would be willing to negotiate,” Scherr said.
City Manager Joyce Wilson said while there may be a hotel room shortage in the city, what is really needed is a full-service hotel with ample meeting, conference and ballroom space. She said the city looks at each hotel project individually, but must also consider whether they would hurt each other.
Scherr said he presented Wilson with a proposal for a convention center hotel early in the year and was told it was premature to develop that kind of project. Scherr said he sees his Courtyard hotel proposal as a stepping stone toward that.
“You have to have conventions at the civic center to have a demand for a convention center hotel,” Scherr said. “We build our hotel room stock in preparation for that need.”
The council discussed the hotel plan in executive session, but city Rep. Emma Acosta said one of the issues raised was the proposed hotel occupancy tax rebates.
“That’s not something that’s up for rebate,” Acosta said.
Voters last year approved an increase to the tax charged to hotel customers to fund the majority of the $64-million Downtown Triple-A baseball stadium now under construction. It’s anticipated the hotel tax will pay for about 80 percent of the ballpark over 30 years.
Wilson called the hotel tax incentives “an emerging issue,” noting that the recently approved incentive package for the Downtown Artisan Hotel did not include hotel tax rebates. The incentive package for a four-star hotel near the airport approved in May included a partial rebate on the hotel tax, she said.
“Both of those went through the same process in a market study,” McElroy said. “Every project is different.”
Cindy Ramirez may be reached at 546-6151.
