As developers prepare to break ground on a 135-room Courtyard Marriott planned for the corner of Third and Florida streets downtown, they’re having to take a fresh look at some of the numbers for the project.
That’s because the construction boom in the multifamily sector both locally and throughout the region has led to a shortage of subcontractors, which is driving up construction costs.
“Prices have gone crazy,” says Bill Fayssoux, project manager for Windsor Aughtry Hotel Group, the South Carolina-based firm developing the hotel. “There is a lot of construction going on in the multifamily sector and the same subs (contractors) building the apartments are building the hotels so sub pricing across the southeast has gotten very high.”
In the case of the Courtyard Marriott—which was first announced in October 2014 but didn’t get the green light to move forward until last October, after the Metro Council approved the creation of a Tax Increment Financing District for the project—the estimated price tag has gone up nearly 10%, from $22 million to an estimated $24 million.
Fayssoux estimates the total cost will be as much as 50% greater than that of Windsor Aughtry’s other downtown hotel, the Hampton Inn, which opened in 2013.
Still, the project is on track to move forward, and Windsor Aughtry hopes to name a general contractor by the end of the month. The developer received bids from five contractors interested in doing the project and has narrowed the field to two Louisiana-based finalists, one from Baton Rouge and the other from Alexandria.
“All the plans have been submitted for permitting and are going through the process so our goal is to start in late May, though early June is probably more realistic,” Fayssoux says.
The project is scheduled to be complete by fall 2017, in order to capitalize on the LSU football season.
Meanwhile, the paperwork for the TIF district that will help Windsor Aughtry offset the cost of construction is being introduced before the Metro Council later this week. Three separate resolutions sponsored by Councilmember Tara Wicker will be introduced to the council for consideration later this month.
The measures establish the structure of the TIF district and enable it to apply to the state Bond Commission for approval to levy taxes.
The council voted 10-1 in late October to create the TIF, which will expire after 20 years. It is expected to generate $800,000 a year in new taxes, $100,000 of which will be rebated back to the developers.
The Metro Council meets at 4 p.m. Wednesday. See the full agenda.
—Stephanie Riegel
