By BECKY KISER
Hays city commissioners Thursday night unanimously approved the first steps towards development of a new Hilton Garden Inn hotel and convention center on west 43rd Street.
They voted 4-0 (Commissioner Henry Schwaller was absent) to execute a Transient Guest Tax (TGT) between the city and Hays Hotel/Mitra Developers, Wichita, and also set a public hearing on Feb. 8, 2018, for the establishment of a Tax Increment Financing (TIF) district.
The city’s financial director Kim Rupp presented the resolutions. Mayor Shaun Musil wanted assurance that “none of this goes into effect until the facility is built and going.” “That is correct,” Rupp confirmed. “There’s really no risk to us,” Musil said. “It’s pay as we go. It should be a win-win for the community.”
Rupp pointed out the TGT rebate agreement is “a little bit cart before the horse. However, this enhances the developer’s capability of securing financing.” Rebate of the city’s 5% hotel guest tax is a first for the city. The developer will receive an annual rebate of all 5% collected on site for 20 years. It’s projected to generate about $1.82 million over the first 10 years and will be used for upgrades and ongoing maintenance at the site. The TGT is used by the Convention and Visitors Bureau to market and promote Hays.
Outgoing Commissioner Lance Jones was attending his last regular meeting. He described the recent changes to the city’s economic development policy and financial incentives “flawless” in this project. Commissioner Sandy Jacobs agreed. “I think it worked really well in this situation.”
“People will remember us losing the truck stop a couple years ago. The system in place at the time did not work,” Jones said. “The system we’ve worked on and kind of tweaked for the last couple of years has everything ready to come to us, as this developer did. If things were in place then as they are now, we’d have a truck stop out at Exit 157 (on Interstate 70). People are talking about this. They really do want a truck stop here. I hope somebody comes in and re-looks at this process and sees how easy it is.” The commission requested the changes in the process.
“This new project is going to bring people to Hays and we’re going to make sales tax off it. It’ll be another venue to have events around town,” Jones added.
The city’s General Fund is financed primarily by sales tax revenues.
Vice-Mayor James Meier is glad the city has no responsibility in running the convention center, something the city hoped to do back in 2012 by imposing an additional tax on much of the retail business on the north side of I-70 for a new facility. The project was tabled in 2014 when Walmart changed its stance about the proposed Community Improvement District (CID).
“This is a way to get all the benefits without having to build it, maintain it, run it,” Meier said, “that’s somebody else’s problem.”
Meier still had a slight reservation about the TIF district but “you can see the schools are getting their outlay portion and things like that.
The new project includes a request for a CID which is scheduled to be addressed by commissioners in late March.
“I think the folks who are building it are going to win because this is a facility we need. I definitely think the city overall is going to be winning,” Meier said. “I really think over the next couple of years the changes in our economic development process are going to bear more fruit than just this.”
“I’ve not heard one negative word about us doing this,” Commissioner Jacobs said. “A $19 million investment in this community is pretty exciting right now.”