Item 4J
Resolution 16-029 – A resolution to amend and restate a 380 Incentive Agreement for Westin Hotel
Item 4J
Hello members of Council. This is Shannon Hamons, Director of Economic Development and Tourism. Item 4J is in reference to Resolution 16-029 for emending and restating an incentive agreement
with SRH Hospitality Southlake Investments, LLC, for an amended and restated 380 incentive agreement.
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Council Action on
380 agreement needed for agreement to remain valid
2016 site plan changes required council action
Council had approved an incentive for the Westin Hotel in 2015 which required the developer to adhere to approved site plan and building plan concepts. However, the applicant submitted
changes to those plans in early 2016. Therefore, Council action was needed to address the proposed changes and align the incentive agreement with the new concept.
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Major Requirement Changes
On May 3 of this year, City Council approved changes to the Westin Hotel plans. On the left, you can see the project requirements that were spelled out in the 2015 incentive agreement.
On the right are the major changes to the proposed amended agreement, which were also incorporated into the plans Council approved May 3. You can see that requirements for rooms, meeting
space and assessed value were all increased in the proposed amended incentive agreement. Also, a $75 million capital investment would be required – no capital investment was specified
in the 2015 incentive agreement. Also, the amended agreement would require construction to begin by June 30, 2017 with completion by June 30, 2019.
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Proposed changes to 380 Agreement
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An incentive of $5.4 million is still proposed in the amended 12-year incentive. However, you will notice on this slide that less of the incentive dollars would be generated by sales
taxes and real and personal property ad valorem taxes. For the amended agreement, more incentive dollars would be generated from the Hotel Occupancy taxes.
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Current 380 Commitment - City
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Estimated total 10-year revenue of $9.259mm to city does not change
Another key provision of the incentive agreement is that the same estimated revenue of $9.259 million will be collected by the city for the first 10 years of the project. This is even
after the incentive is provided to the hotel.
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Return on Investment
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Current Annual Benefit ~$0
Annual Benefit During Incentive $925,907 (avg)
Annual Benefit After Incentive $1,766,086 (avg)
Equivalent to $200 million development
This chart depicts the annual estimated revenue return to the city for the first 20 years. It is important to note that the site, currently owned by Gateway Church, is generating no
taxes.
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Discussion
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If you have any questions regarding the amended and restated incentive agreement for the Westin Hotel, please contact me or CFO Sharen Jackson. Thank you.