Council gives staff direction to draft 15-year, $10 million TLT rebate proposal for new hotel

Dundee, Ore. — City leaders told staff to draft a TLT rebate proposal tied to a new hotel development that would run up to 15 years and be capped at $10 million, after a council discussion on May 20 about the merits and risks of using a transient lodging tax rebate as an economic development tool.

City staff framed the discussion as a due‑diligence review of an approach that is uncommon in Oregon but used in some California and Utah jurisdictions. "This isn't something that's used here in Oregon all that much, but there are examples of where it is used elsewhere," said Ashley, a consultant who reviewed comparable programs for the city. Staff and several councilors said they wanted to keep the city's statutory 70/30 split in place (70% for tourism uses; 30% to the general fund) while allowing a city rebate to be carved from the city's share, subject to caps and a structure that limits fiscal exposure.

Representatives of the hotel developer (identified in the meeting as SKB) said the company could work with a 12‑ to 15‑year schedule and a $10,000,000 cap. "That would work, for us," said John Olivier, speaking on behalf of the project; Olivier said the developer preferred the longest term possible if the cap remained $10 million, but added the company was flexible about ratio and timing.

Councilors debated the term length, the stage at which abatements would begin, and the community budget impact if more than one hotel later sought a similar concession. One councilor urged the city to treat the measure as a one‑off initial tool and invest conservatively. Another suggested reworking the proposed schedule so the largest abatements occur early in the term and smaller abatements occur later to reduce cumulative cost and keep the cap under $10 million.

Staff said the city's draft would maintain a 70/30 statutory split and add a dollar cap; the council asked staff to return with a formal resolution reflecting a 15‑year term and a $10,000,000 maximum rebate for review at the next meeting. No formal binding vote on the rebate was taken at the May 20 meeting; councilors instead gave staff direction to prepare the agreement language and financial schedule for a future vote.

Councilors also discussed pending state legislative proposals that could loosen current restrictions on TLT spending — for example, allowing some TLT dollars to fund infrastructure and public‑safety costs — and noted those changes could affect future policy choices. The developer said the total project value is roughly $60–65 million and that the company was eager to begin construction once terms were settled.

The council directed staff to work with developer representatives and return to the June 1 meeting with a draft resolution and numerical schedule reflecting the 15‑year/$10 million framework for council review.