Committee establishes business district and redevelopment plan for proposed Spring Hill Suites

The Community Development Committee advanced a three-part package to enable a Spring Hill Suites hotel and associated development at the northwest quadrant of Highway 50 and North Greenmount Road. The committee approved an ordinance establishing the district boundary (Ordinance 2.2) and a separate ordinance imposing the business-district tax of up to 1 percent (Ordinance 2.3). Staff said the tax may apply to up to three tax types — hotel-motel tax, sales tax and certain service taxes — but the total additional tax is capped at 1 percentage point and a business within the district may elect which eligible tax type to collect. "That 1% is the max. It's not gonna be like 3%." a committee member said. Staff also recommended approval of a redevelopment agreement (Ordinance 2.4) with the developer for reimbursement of eligible project costs. Greg Anderson, director of community development, said eligible costs submitted by the petitioner and reviewed by staff and the city attorney total approximately $18,222,000. The breakdown provided in the packet included professional services and planning of $563,903; land acquisition $1,500,000; site preparation $100,000; public infrastructure $350,000; and construction costs of roughly $15,700,000. Anderson described how reimbursements will work: the developer fronts project costs and submits reimbursement requests to the finance department; the city will verify that submitted expenses are eligible and reimburse only from the business-district tax receipts that have been collected and deposited to the district account. "So we're not fronting anything," a committee member said; staff confirmed reimbursement is performance-based on tax collections. The proposed business district would cover about 4.88 acres at the northwest quadrant of the Highway 50 and North Greenmount Road intersection and include five parcels, with the Spring Hill Suites planned on roughly 2.88 acres of the district. Staff said business districts may be established for up to 23 years and that a redevelopment agreement must be executed for any reimbursement of eligible costs. Committee roll calls on the ordinances were affirmative; committee members also discussed that public infrastructure improvements tied to other recent business districts had been reimbursed in prior cases, but staff said no extra public infrastructure is being required for this project and that most costs identified are on-site construction and professional costs. Next steps: the ordinances and redevelopment agreement will go to the full city council for final action; any developer reimbursement will depend on actual district tax collections over the life of the district and is not guaranteed to equal the full $18.2 million estimate.