Columbus officials tonight may take a step towards solidifying a funding instrument to aid a proposed two-hotel development near the intersection of Highway 82 and 18th Avenue North.
The Columbus City Council tonight is expected to discuss a tax increment financing plan to aid local developer Mark Castleberry in completing the nearly 200-room hotel development.
After discussing the bond issue, the council likely will decide if the city will enter into an interlocal agreement with Lowndes County to support the TIF bond issue.
If the council votes to support the interlocal agreement, the issue likely will be taken up by the county Board of Supervisors during its Aug. 31 meeting, said Lowndes County District 1 Supervisor and Board President Harry Sanders.
If the plan is approved by the city and county, Castleberry could have access to the bond funds as he begins construction of a 95-room Fairfield Inn and a 103-room Courtyard by Marriott in the now-vacant lot.
Although the details of the TIF plan, which could be worth more than $2.5 million, were approved by Columbus and Lowndes County officials last year, neither governing body voted to “finalize” the plan, Sanders explained.
“The city and the county already passed this TIF bond once before, but we basically just approved the concept,” Sanders said. “We never got around to passing the interlocal agreement that would have finalized the plan.”
Through the TIF bond, Castleberry could receive more than $2.5 million to use for the project if he meets certain criteria.
The total project is estimated at $28 million to $30 million. Employment is estimated at 748 jobs, including construction.
Because the financial market is struggling, approval of the TIF bond funding is “very important” to the project,” Castleberry noted, also adding the market for hotels is growing, “especially with the industrial development.”
If the developer met the criteria, he would use ad valorem property taxes and sales taxes generated by the development to pay back the bonds, explained Columbus Chief Financial Officer Mike Bernsen.
“If the developer hits a certain amount of sales or meets whatever criteria is outlined in the agreement, a portion of the sales or property taxes generated by the project are used to pay back the bonds instead of going into the city or county”s general accounts,” Bernsen said.
“When you issue TIF bonds, you have to strike a balance between giving away the farm and making the area attractive for developers,” Bernsen added.
If the TIF plan passes, half of the sales tax generated by the development and all ad valorem property taxes paid on the development land during the next 10 years would be used to repay the bond amount, Bernsen explained.
Although the TIF bonds would not be issued until Castleberry begins constructing the hotels, the developer would have to complete the project within 60 months of breaking ground at the site to receive the funds,
Currently, the bond criteria also requires Castleberry to construct at least 10,000 square feet of restaurants near the hotels before he can receive the funds.
However, the developer said he plans to ask the city and county to drop the restaurant requirements to make the project “more feasible.”
“We are asking that the restaurant requirement be dropped. It”s just a matter of financing for us at this point,” Castleberry said. “The restaurants are not under our control, but the construction of the hotels is under our control.
“It”s just an effect of the world we live in right now. Restaurants are just kind of in the toilet right now,” Castleberry added. “We are still highly motivated to get those restaurants here, but we are asking that they not be required for us to get the bond money.”
Construction at the site could begin within the next few months, Castleberry said. The developer now is waiting to learn if the city was awarded a $2.5 million U.S. Economic Development Administration grant.
If the EDA grant is awarded, the funds would be used to construct a road through the development property, build a bridge across Moore”s Creek and complete several road improvements on Sixth Street North and 18th Avenue North.
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