The Town Council is scheduled to review a potential seven-year tax abatement on Tuesday for a plan to construct an extended stay hotel on Kelly Road.
The council meeting is scheduled to begin at 7:30 p.m.
The plan for a Candlewood Suites occupies 355, 359 and 361 Kelly Road, land in-between the Free Spirit Cafe and the Tri-City Plaza shopping center.
The abatement plan was reviewed by the Economic Development Commission last week and is being recommended to the council.
Economic Development Coordinator Shaun Gately is also endorsing the abatement schedule.
The abatement covers the increase in taxes for the property.
In a memo to the council, Mayor George Apel said the administration
is in favor of the abatement as long as ground is broken by Oct. 16, 2014 and the project is completed by Oct. 16, 2017. The abatement "is limited to a national chain extended stay hotel," Apel said in the memo.
Here are the basics of the project:
• Gately said the hotel would include 70 rooms and measure 31,000 square feet.
• The project has an estimated total cost of $7 million and "out
of that, $6.4 million would be in improvement costs," Gately said.
• Gately said a preliminary estimate has the property appraisal increasing by $3,150,000, which results in an assessment increase of $2,205,000.
• Based on the current tax rate of 33.63 mills, the unabated tax implications would result in an estimated increase of $74,154 in taxes on the property per year.
• The hotel would have 25 permanent employees and 50 construction workers would be hired while the hotel is being built, Gately said.
• The project has a new operating entity - True Hospitality Group LLC - for the Candlewood Suites brand, a subsidiary of Holiday Inn.
• The managing partner of this group is Victor Antico from the Holiday Inn Express, across the street. Deb Javit from Tri City Plaza LLC is also involved with the project, Gately said.
• The developers have received conditional approval from the Small Business Administrations for a loan to finance the construction.
Here are the particulars of the abatement on the $74,154 in increased tax value.
• A 100 percent reduction for the first year.
• A 75 percent reduction for the second and third years.
• A 50 percent reduction for the fourth and fifth years.
• A 25 percent reduction years 6 and 7.
The property returns to the full assessment for the eighth year and beyond.
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