By BECKY KISER
With no discussion by the three Hays city commissioners who were present at Thursday night’s meeting, two unanimous votes approved the next steps in the construction of the proposed Hilton Garden Inn and a convention center north of Interstate 70.
The commission approved setting two public hearings on April 26, 2018 regarding the adoption of the hotel’s TIF (Tax Increment Financing) Redevelopment Project Plan and the establishment of the associated Community Improvement District (CID).
The developer, Hays Hotel LLC and Mitra Developers, LLC, is requesting TIF financing on a pay-as-you-go basis for 20 years. City commissioners established the TIF district by passing an ordinance at the Feb. 8 meeting, which “froze” the base year assessed value for the property.
Construction of the 100-room full-service hotel, restaurant, and conference center at Vine Street and 43rd Street, immediately west of Walmart, would begin later this year and be completed within 18 months. The developer will also pay for infrastructure, including water, sewer, street, utilities and pedestrian infrastructure.
Phase Two of the project involves construction of a new restaurant and other commercial retail on the two outparcels of the project site. Tentatively, Phase Two construction, completion and operations would begin in early 2023.
Total cost of Phase One and Phase Two would be $19.3 million.
Approximately $3.7 million in TIF revenues is estimated to be generated during the 20-year term. TIF reimbursable expenditures are expected to be $3.9 million. “They’re predicting their revenue would be a little short of what’s eligible for expenditures,” said Rupp.
A 2% CID tax would be in place for 22 years yielding $3.1 million. Total CID eligible costs are estimated at $14.7 million on a pay-as-you-go basis. “They are seeking their own financing. They are not asking the city to issue any bonds.”
The initial 10-year rebate of the hotel Transient Guest Tax (TGT) is estimated at $1.8 million.
Rupp also spoke about the benefits the project would bring to the local economy, in addition to the increased number of hotel rooms in Hays. “We would also gain that coveted convention center to attract visitors.”
Developers expect to create 80 construction jobs and 88 operational jobs.
City sales tax revenue would also increase. Sales tax collections support the city’s General Fund.
“In this case, the TIF will only be the increment of the ad valorum,” Rupp explained. “Sales tax will not be captured. Sales tax will go to the normal taxing entities that it was intended for.” City policy does not allow general or special city or county sales tax generated by the project to be captured by the TIF.
Rupp also pointed out a study by Wichita State University’s Center for Economic Development has determined the hotel project has a benefit-to-cost ratio of 1.78. “So for every dollar input, it’s estimated $1.78 would come back out.”
Commissioners Henry Schwaller and Chris Dinkel were absent from the meeting.
A 15-minute executive session was called at the end of the meeting to discuss possible acquisition of property. No action was taken.