At our Tuesday meeting, the Council approved an incentive package to a hotel developer that plans to build along SH-190 near the GISD Special Events Center. The agreement covers the eventuality of two hotels at that location. The incentives are to bring substantial new development to Garland. The Council, the staff, and the Economic Development Partnership (City, School District, and Chamber of Commerce) agreed that the package was appropriate and necessary. Additional information on the development as posted earlier.

Background Briefing from City Staff:
 
Second Century Investments is proposing to develop a 17-acre tract of land located on the south side of the 5100 block of President George Bush turnpike adjacent to and north of the Garland Independent School District's Special Events Center. The development will contain two hotels, a Hyatt Place Hotel with 120 to 130 guest rooms, an indoor swimming pool and spa, a bar and lounge, a 6000-square-foot ballroom, a 2000-square-foot pre-function area, an 800-square-foot boardroom, and, possibly, a second hotel comparable to a Hampton Inn or Spring Hill Suites franchise with approximately 105 to 120 guest rooms with a limited conference area. The development will also include four restaurants and a retail/office complex containing approximately 62,000 square-feet. The development, including hotels, totals 286,200 square-feet.
 
The proposed incentive package for each hotel includes partial return of Hotel/Motel Occupancy Tax for a period not to exceed 20 years and a partial ad valorem tax abatement on the value of the improvements for a period not to exceed six years. The incentive agreement also states any improvements required to be made to Elliot Avenue, the eastern edge of the site, as a result of the proposed development (right turn lane addition) would be at the City's expense, not to exceed $500,000. [Latest projections conclude this cost will be less than $200,000.]
 
The Hyatt Place Hotel incentive package is capped at $4,587,800, not including the Elliot Avenue improvements, and the second hotel incentive package is capped at $3,894,000.
 

	Hyatt	Second	Combined
	Place	Hotel	Hotels
(a) Return of Hotel/Motel Tax	3,878,618	3,359,433	7,238,051
100% Yrs 1-14
80% Yrs 15-17
25% Yrs 18-20
(b) Property Tax Abatement	617,191	534,575	1,151,766
100% Yrs 1-4
80% Yrs 5-6
(c) Return Property Tax from Agricultural Rollback	91,991	0	91,991
(d) Infrastructure Improvements	500,000	0	500,000
TOTAL INCENTIVE PACKAGE	5,087,800	3,894,008	8,981,808

 

If the development does well, because the amounts are capped, the incentives will be paid sooner and taxes will be collected unabated. If it doesn't do as well as expected, the developer will not receive the amounts allotted.
 
Currently, the value of the development in taxes over twenty years is expected to be $33,362,529. That amount will be divided between the developer, school district, and the city:

• Second Century: $8,981,808
• GISD: $13,015,870
• Garland: $11,364,851

Garland's Hotel/Motel Tax is 15%, the highest allowed by the state. The tax is restricted to expenses that encourage or promote tourism.
 
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