Morgan City RDA approves amended incentive agreement with Comfort Inn operator

The Morgan City Redevelopment Agency on Dec. 10 approved Resolution R-24-45, adopting an amended economic development incentive agreement with Revaba Morgan LLC, doing business as Comfort Inn and Suites. The board voted unanimously to adopt the resolution after staff described two changes requested by the hotel’s purchaser, including a date change and removal of a provision that would have reduced payments in a single low-collection year.

Agency staff said the amendment removes a clause that would have reduced the payment for a year in which the RDA did not collect enough tax increment revenue. Ty, a staff member, told the agency that the amendment strikes the paragraph because "it really doesn't make any sense to worry about 1 budget year" and said the RDA would instead cover any shortfall across years so the total committed amount remains payable.

The nut graf: the change preserves the RDA's existing dollar commitment while removing a year-by-year withholding mechanism; board members discussed the clause's practical effect, the agreement's payment schedule and the RDA's authority to terminate the arrangement if an unauthorized transfer or a nonoperating hotel situation arises.

Board and staff discussion focused on three points: the legal effect of removing the paragraph tied to state law, the payment schedule and whether the incentive payments were front-loaded, and the RDA’s contractual rights after an involuntary transfer or bankruptcy of the original developer. Gary, identified as legal counsel, described the deleted paragraph as "good legal language" that typically prevents future controversy if state law changes, but said in practice the legislature generally does not retroactively relieve an entity of an existing contract. Ty said the RDA "would just go and deficit that 1 year and then pull out of it in a future year."

Board members asked whether the incentive is a one-time payment or an aggregate paid over time. Discussion noted language in the agreement referring to an "aggregate of $175,000." Agency staff said the agreement contains tiers that front-load larger payments in early years; one referenced sequence discussed during the meeting included a first payment on signing and another in February, and staff characterized the schedule as "way front end loaded." The board did not change the dollar total during the session.

Staff also reported the RDA has a contractual right to terminate the agreement if a transfer occurs without authorization. Ty and legal counsel said the ownership change that brought Revaba Morgan LLC forward appeared involuntary in the original owner’s bankruptcy and that the RDA had sent required notice under the original agreement. Gary said the RDA can act if there was an unauthorized transfer and that the agency must annually appropriate funds for its obligations.

The resolution adopting the amendment (R-24-45) was moved and seconded; the board then took a roll-call vote and the measure passed unanimously. After the vote the chair said the meeting would adjourn for 15 minutes.

Votes at a glance: Resolution R-24-45, adopting an amended economic development incentive agreement with Revaba Morgan LLC d/b/a Comfort Inn and Suites — approved (unanimous).