Since the Metro Council voted last month to deny the creation of a special tax increment financing district to help fund construction of a new Courtyard Marriott downtown, the hotel’s developers have been meeting individually with council members in hopes of convincing them to bring the TIF measure back up for a vote in the next few weeks.
Representatives of South Carolina-based Windsor Aughtry Company and their local partners—Gordon “Skeet” Leblanc and his sister, Moffett Leblanc Strain—have met with all but three council members and are optimistic their message is being heard. Dozens of local businesses, particularly downtown merchants, have also sent letters in support of the project to the council.
But the developers say it’s too soon to know whether they have the seven votes needed to pass the TIF on a second go-round.
“I believe they’re listening and we’re making headway,” says Strain, who, with Leblanc, owns the surface parking lot on which the 135-room hotel would be built as well as an equity interest in the project. “We’ve gotten tremendously positive feedback once people understand. … But I think the question for the council is the question for Baton Rouge: Do we want to be a progressive city?”
For Windsor Aughtry, which was welcomed to Baton Rouge in 2010 and successfully developed the downtown Hampton Inn three years later, and the Leblanc-Strain siblings—longtime downtown property owners whose family has lived in Baton Rouge for generations—last month’s 5-4 vote by the council came as something of a shock. The Courtyard Marriott, proposed for the intersection of Florida and Third streets, had been much heralded by city-parish leaders when it was announced last October. Getting approval for a TIF was seen, at the time, as a foregone conclusion.
But it took months to get the TIF measure before the council, for reasons that are not entirely clear. By the time it was placed on the agenda in June, new TIFs had been created for two other downtown hotels: the Holiday Inn Express and Mike Wampold’s Marriott Autograph hotel, which will be called the Watermark and is to be located one block from the proposed Courtyard site. Council members started to question the need for yet another downtown hotel financed with public dollars.
Since then, the project’s developers have been on something of a re-education campaign, trying to explain to council members about the TIF they are seeking. At a proposed 2 cents, it would be lower than the Hilton Capitol Center’s TIF, which is 8 cents, or Hotel Indigo’s and The Watermark’s, both of which were set at 6 cents. It would also generate an estimated $800,000 in taxes for the city.
“Of all the hotels downtown what we’re asking for is the least of any amount,” Leblanc says. “The other projects all benefitted from a TIF. Why are we turned down? It doesn’t seem very fair at all.”
They have also shared new data about the hotel submarket in which they believe the Courtyard Marriott would directly compete. The data suggests the market in that particular sector is strong. Revpar, or revenue per available room, is up nearly 11% year to date over 2014 to $82.30. That’s an important metric and is 50% higher than the revpar for the entire Capital Region hotel market. Average daily rates in the submarket are also up nearly 4% to $118.58, while occupancy rates have risen 6.7 percentage points to 69.4%.
The submarket includes three downtown hotels—the Hampton Inn, Hilton and Hotel Indigo—and four limited-service hotels around College Drive and South Acadian Thruway. It does not include the Belle of Baton Rouge Casino hotel, which Windsor Aughtry Principal Bill Fayssoux says caters almost exclusively to casino patrons. Nor does it include the full-service Renaissance, Crowne Plaza or Baton Rouge Marriott.
“We cater to the road warrior, the business traveler,” Fayssoux says. “If anything, our biggest competition will be ourselves—our own Hampton Inn.”
Fayssoux also notes that at the request of two other Marriott properties in the market, Marriott did a market assessment last summer before granting the Courtyard franchise to Windsor Aughtry.
“If Marriott feels comfortable with its decision that this market can support two more downtown Marriott hotels, I don’t know why anyone else would question it,” he says.
It’s not clear when the TIF might find its way back on a Metro Council agenda, though Fayssoux predicts it will be in the “very near future.” What is certain is that if the measure fails a second time, the project is dead. Unlike hotels developed from former office buildings, the Courtyard Marriott will be a new construction, which means it won’t qualify for lucrative state and federal historic building tax credits. In other words, without a TIF, Leblanc and Fayssoux say the numbers just don’t work.
It’s more than that, though. Leblanc says he doesn’t want to build a cheap hotel on the premier corner in Baton Rouge’s growing downtown. Plans for the hotel have already been scaled down somewhat in an effort to save money. Nine of the originally planned 146 rooms have been eliminated, as has The basement level. Together, those changes will cut the project cost from $25 million to $22 million.
But the developers are adamant they are not going to cut anymore corners. Leblanc and Strain say they don’t want a “big box” hotel on their property. They insist it will be a first-rate project with architectural amenities like balconies with a river view.
“We’re not interested in doing a hotel on this corner unless it is a quality project,” Leblanc says. “We’re excited about wanting to do this project. The question is, do they really want us?”
—Stephanie Riegel
