The Council received an update from Staff last week at our Work Session about a hotel, probably two, that is looking to come to Garland on SH-190. It would sit between the frontage road and the GISD Special Events Center.   Also located on the property would be three restaurants, currently expected to be Two Rows, La Posada, and International House of Pancakes. There would be one building of offices and another with retail. Possible tenants in the retail area would be Kinko's and a coffee shop. Kinko's would complement the hotel in many ways. An order could be sent over the Internet to the printer and be waiting for the hotel guest when she checks-in.   The location adjacent to the SEC is very important. Discussions between the hotel developers and GISD SEC have contemplated many joint events. The hotel would be able to reserve the SEC for conference events and provide a restaurant, catering, and a ballroom to the SEC. There would be access to the SEC across the property from SH-190, giving alternate lanes for quicker entry and departure.   The developer currently expects the six-story hotel to be a Hyatt Plaza, a suites hotel. They think there is a higher demand for suites since many of the functions at the SEC attract out-of-town families. Also, area residents with out-of-town visitors would have more space in a suite.   The developer would also market golf weekend packages at Firewheel Golf Park as a way to encourage people to stay longer. That would extend the benefits to the Golf Park and the Firewheel Town Center.	Click to enlarge
	Click to enlarge

The previous Council tentatively approved an incentive package that will return some of the Hotel/Motel tax and property tax to the developer. I have reviewed the package and support it.

(a) Return of Hotel/Motel Tax	3,878,618
100%—Yrs 1-14
80%—Yrs 15-17
25%—Yrs 18-20
(b) Property Tax Abatement	617,191
100%—Yrs 1-4
100%—Yrs 5-6
(c) Infrastructure Improvements	500,000
TOTAL INCENTIVE PACKAGE	4,995,809

The hotel site is expected to generate well over $13 million during the 20-year period. Rebating about $4.5 million seems a good return, particularly if it stimulates the building of three restaurants, the office building, and retail center. The property and sales taxes from those ventures makes the deal much more attractive.
 
Hotel/Motel taxes are essentially limited to promoting tourism. No hotel and we'd see no hotel/motel taxes. Returning them in this case to stimulate all the other development is a win-win for the city because we offer no money in advance. Much the same is true on the property taxes—the city would start collecting property taxes after four years and at 100% after six years.
 
There would be some investment required of the city to improve Elliot Ave that runs from SH-190 to Naaman Forest High School, and for extending utilities to the property line. That is budgeted at $500,000 but expected to be less.
 
These amounts are capped. If the hotel does better than the model, we will reach the caps sooner and the extra money will flow to the City. The incentives are structured so that the second four-story hotel would receive the same package. The biggest question on this second hotel is what kind will it be? That is unknown but the package will specify the calibre of hotel that must be constructed in order to receive any additional incentives.
 
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2 comments

Comments:

Comment from: Les Cook [Visitor]

Doug, how do you know that Citizens would not receive any hotel tax if this deal is not completed on this property? How much hotel tax has been abated by Garland Council's in past years'? Will this new Economic Development Incentative Policy for Hotel Tax Abatement be available to all other Hotel Developers in Garland on a Uniform Basis? Is the Abatement deal tied to just one Private Developer or is this a new tool in the Chamber package for all? Why would you bind a future Elected Official with liability for a "Motel X" for an unknown future date? Did you disclose your prior meetings or conversations with Developer on this project, if you had one as reported? These are not meant to be personal comments, but questions I feel answers on would benefit the Public Interest and clear up some things. I will probably have more questions and will try to be civil. I am against this Deal from what I know so far.

Les Cook

10/12/06 @ 11:11

Comment from: Grant Reid [Visitor]

Mr. Athas-

I feel like you and the council are right to support this project. I've done some digging on the Hyatt Place concept and I feel like it's a good match for business and convention travel.

My concern comes from the other hotel site. Since the first hotel will be a Hyatt property, does this mean that the second will have to be as well? I feel like there is a gap in Hyatt brands for the second site. Further, it seems there might be a need for a more "standard" type Marriott hotel, for example for traffic that might be there for school events. As a recent former student of GISD, I can say that the money given to lodgings on school district trips is typically limited, and am not entirely sure if an all-suite hotel would be marketable to everyone.

Can you shed some more light on the specifications the package will include about the second hotel?

10/12/06 @ 19:03

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