Courtyard Marriott TIF up in the air as email questions viability of downtown hotel market
When the Metro Council adjourned its June 24 meeting before taking up any business because it lacked a quorum, one of the casualties on the agenda was the proposed tax increment financing district to help fund construction of the Courtyard Marriott planned for the intersection of Third and Florida streets.
Now, some council members say the TIF—which appeared to have widespread support just a few months ago—didn’t have the votes to pass that night and won’t necessarily be a sure thing when it comes up again at the July 22 meeting.
“I don’t think we had the votes that night,” says Councilman and Mayor Pro Tem Chandler Loupe, who adjourned the meeting early because so many council members were ill or absent. “I don’t know if we will have them on the 22nd.”
Among the factors giving some council members pause is an email circulating among them recently. The message questions the viability of the downtown hotel market and is written by the very developer seeking the TIF for the Courtyard Marriott—Bo Aughtry of Windsor Aughtry Hotel Group.
Aughtry sent the email in March to local developer Mike Wampold, who is developing a competing Marriott Autograph hotel down the street from the planned Courtyard site. At the time, the developers were vying to be the first to get their projects off the ground. In the correspondence, Aughtry asks Wampold to “re-examine alternatives—or even delay development—as, I believe we will all be damaged with added room supply in a market that already suffers.”
The email goes on to say that “the downtown Baton Rouge market remains quite soft, with the Hilton offering $96-$99 rates to all large accounts—incredible. Nobody in this sub market will finish at 70% (occupancy) this year … It is simply a very difficult lodging environment.”
Councilman John Delgado, who remains undecided on the latest TIF, says the email raised serious concerns among some council members as to “whether or not we need to basically subsidize one hotel to the detriment of the existing hotels.”
“If we do the TIF for this Courtyard, are we not hurting the existing players downtown—the Indigo, Hilton and all that?” Delgado wonders.
Councilman Buddy Amoroso, who also received the email, agrees and remains undecided. Amoroso says also factoring into his decision are comments made last week to the Baton Rouge Press Club by Downtown Development District Executive Director Davis Rhorer. In his remarks, Rhorer notes that once the Courtyard opens, downtown will have some 1,200 hotel rooms.
Amoroso points out that the argument long used by supporters of downtown hotel TIFs was that the incentive was needed to get the downtown hotel market to 1,000 rooms—a threshold, of sorts, in the hospitality industry that would make it easier to attract large convention groups to the city.
“If we’re at 1,000 rooms before the Courtyard Marriott, why do we need a TIF to get us to 1,200 rooms?” Amoroso says. “I’ve been talking to a lot of real estate professionals, and the last thing you want to do is create an overbuilt market.”
Windsor Aughtry officials decline to comment on the situation, or the effect the TIF delay is having on the project. The development firm has yet to actually acquire the vacant parking lot on which the hotel will be built from its local owners. The deal was supposed to be completed by June, and Aughtry originally said he hoped to begin construction by May. Now, the project is several months behind at best.
Still, some Council members say they will likely vote for the TIF, however reluctantly. Loupe says he will support it because he committed to support the project several months ago. Councilman Joel Boé says he will likely vote for the TIF, noting that even if the Courtyard Marriott puts downtown over the 1,000-room threshold, it’s unfair to change the rules in midstream.