The Metro Council tonight will decide whether to create a special downtown taxing district to help finance the new 89-room Holiday Inn Express, which is scheduled to open this summer in the old Savings and Loan Building at 400 North Blvd. The Tax Increment Finance district, if passed, will generate $12 million for developer Pete Patel, who will receive a 2% rebate of the 13% hotel tax.
If approved by the council, the TIF will be the latest of several such districts created to help finance downtown hotels—but it likely will not be the last. Another hotel developer, Windsor Aughtry, is also seeking a TIF for its planned project, the Courtyard Marriott, which will be developed at the corner of Florida and North Third streets.
The Courtyard Marriott TIF will be introduced at tonight’s council meeting, though it will not be discussed or voted on until the June 24 meeting. Like the Holiday Inn Express TIF, the Courtyard Marriott TIF would remit 2% of the hotel sales tax back to the developers, who say the incentive is key to the success of their project.
“While we are big believers in the long-term success of downtown Baton Rouge, as evidenced by our development of the first newly constructed hotel in 50 years with the Hampton Inn and Suites, it is crucial for there to be public support to bridge the gap of short term economics amidst rising development costs,” says Bo Aughtry, principal of Windsor Aughtry Co., which also developed the Hampton Inn downtown that opened in 2013.
Earlier this spring, the council created a TIF for developer Mike Wampold’s planned hotel in the old LNB Building at 150 N. Third St. The Hampton Inn, Hotel Indigo and Capitol House Hilton hotels in downtown all previously TIFs as well.
Windsor Aughtry has not yet closed on the parking lot that will be the site of the hotel and—with Wampold’s planned hotel moving forward just down the street at the same time as the Courtyard—the market is more competitive than it was last fall, when the Courtyard was first announced. Windsor Aughtry says that makes the TIF more important than ever.
Though some Metro Council members have questioned the necessity of using public tax dollars to finance private hotel projects, the Holiday Inn Express TIF is likely to pass tonight. Council members say there’s too much at stake with the redevelopment of downtown to change the rules in midstream.
“I am hoping we can get to the point where we no longer need these TIFs,” says Metro Councilman John Delgado, who is also a downtown business owner. “But these get us over the 1,000-room threshold so for now, these TIFs are necessary for these projects.”
The council convenes on the third floor of City Hall, 222 St. Louis St., at 4 p.m. See the full meeting agenda.
—Stephanie Riegel
