Developers propose 90‑room 'Reveries' hotel in Dundee and seek transient lodging tax rebate to bridge financing gap

Developers with Embarcadero Hospitality Group and Portland‑based SKB presented a plan to build a 90‑room boutique hotel, branded “Reveries,” north of Highway 99 in Dundee and asked the City Council to consider a temporary rebate of transient lodging tax (TRT) revenue to close a financing gap.

Why it matters: council action on a TRT rebate could make the project financially possible and generate new ongoing lodging tax and property tax revenue for the city while creating retail space, jobs and a rooftop bar that developers say would draw visitors into downtown Dundee.

Who and what: Sandra (Saundra) (Embarcadero Hospitality Group) and John Olivier (SKB) described a ground‑up hotel with five attached “casitas,” a courtyard, rooftop bar, conference/boardroom space and street‑facing retail that the team intends to lease to a brewery and a bakery/coffee operator. “We envision this hotel not only as a great destination for visitors to come and experience Dundee ... but we also really envision it as a hub for the community that locals can enjoy,” Saundra said.

Economic case: developers presented pro forma estimates and a market study by ECONorthwest. They projected the hotel would produce more than $20 million in TRT receipts over 15 years; using their proposed revenue‑sharing schedule the city would net an estimated $12 million over that period (figures shown in the packet are in today’s dollars). The team proposed a 15‑year abatement that is front‑loaded to support stabilization, with an overall sharing in which roughly half of projected TRT net remains with the city and roughly half returns to the developer under the proposed schedule; developers also presented an estimated incremental property tax benefit (first‑year property tax roughly $340,000 in their underwriting) and estimated SDCs/permit receipts of about $1.3 million.

Developers’ request and rationale: SKB and Embarcadero asked the council to authorize a TRT rebate program (or approve a single project rebate) to mitigate market and construction risk. They said the net present‑value gap between required upfront capital and projected future TRT receipts is about $6 million (the developers characterized that as the financing shortfall that a rebate helps close). John Olivier framed the incentive this way: “The TRT rebate is a unique tool ... it is not a subsidy that’s paid by the city, directly. It is paid by visitors of the community who are using the resources.” He and Saundra emphasized that the rebate would be payable only after the hotel opens and generates TRT revenue.

Design and community anchors: the proposal shows 90 rooms in the main building, five casitas for a higher‑end offering, a central courtyard with year‑round seating, a lobby lounge, a rooftop bar with partial cover intended for year‑round use, and ground‑floor retail spaces facing Highway 99 (developers said they have LOIs in place with a brewery and a bakery/coffee operator). The team said the project aims to increase walkability, support Destination Dundee initiatives, and spur additional commercial activity such as a potential local market operator being discussed for the adjacent La Sierra site.

Timing and conditions: developers said planning staff is aligned, that an ODOT approach permit has been approved, and that they were scheduled for a planning commission hearing (SDR) the next day. They asked council to provide directional approval or a program framework by early‑to‑mid May to support equity and debt underwriting for a late‑summer 2025 construction start with an opening target in 2027 and stabilization by 2030 (developers’ ramp assumptions estimate multi‑year stabilization typical of hotels).

Council discussion and clarifications: councilors asked about the size of the requested abatement, transferability on sale, the effect of a higher TRT rate (developers modeled 10% in packet figures), projected real estate tax impacts, and whether the rebate would reduce funds available to the general fund. Staff noted state law currently applies a 70/30 split for TRT uses (the transcript referenced that split and ongoing legislative discussion about flexibility); councilors emphasized the city needs to preserve the general fund portion of TRT revenue. Developers said their packet modeled a static 10% TRT rate and that figures could be revisited if the city changed the rate in the future.

No formal council vote on the rebate was taken at the meeting. Councilors asked staff and city counsel to draft and review possible agreement language and to return with a recommendation in May (councilors said budget and legal review must precede any final approval). Developers said they will continue planning‑process steps (planning commission hearing scheduled) while the city considers policy and legal terms.

Ending: council members expressed support for pursuing tools that spur catalytic downtown development but asked staff to return with legal language and budget implications, including guardrails to protect the city’s general fund share of TRT.