Despite the current controversies about tax increment financing for local hotel construction projects, a developer and a hotel manager expect the financing method will increase in popularity.
Ralph Ney, vice president of the Baton Rouge Area Hospitality Management Association, says the recent session shows the Legislature is open to approving TIFs not just in blighted areas. Plans for TIF that will turn the old Jimmy Swaggart Ministries dormitory into a conference hotel were approved by the House and Senate, while the House passed a bill establishing a TIF in Perkins Rowe, which would be used to finance a Hilton Garden Inn. “If you can get all the representatives from Baton Rouge backing the same bill, you can get a TIF, without consulting anybody in the industry,” says Ney, whose group opposed both financing plans. “This is going to encourage people that never thought about doing a TIF.”
John Schneider, president of Cyntreniks Group, which received a TIF to renovate the Hotel King, says while getting a TIF passed is an arduous process that involves winning the backing of the Legislature, governor and Metro Council, it’s the only way some projects make financial sense. “Sources of funding are very, very hard to come by,” he says. Schneider says TIFs balance out the investment return and make it worthwhile to build hotels in areas such as downtown, as opposed to the Corporate Boulevard corridor. “There’s a merit of having a low economic incentive,” he says. Schneider expects to announce which national firm will put its name on the King at next month’s Downtown Development District meeting, in advance of interior demolition starting later in July. The 93-room boutique hotel is expected to open downtown in November 2010.—Timothy Boone
