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Dateline:
Colleyville - Friday, January 04, 2002 9:10 AM
LUXURY
HOTEL PLANNED FOR VILLAGE SEEKS INCENTIVES FROM CITY…by
Linda Newton
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The
developer of the luxury hotel planned for the Village of
Colleyville, which was announced in a joint press conference by
Realty Capital and the City of Colleyville on October 23, 2001,
is seeking economic incentives from the city, which could
potentially total almost $2,000,000. LNO requested all documents relative to the development of
the hotel under the Open Records Act and received a copy of the
proposal from the Monopoly Hotel Group to the City dated October
8, 2001. |
Richard Myers and
Mayor Donna Arp at the announcement of the "Luxury"
Hotel on October 23, 2001. At that time the city did not
reveal the hotel developer had requested numerous
incentives. |
| A
meeting between city officials and the prospective developer
was held in early October.
A two-page list of possible incentives for general
discussion was prepared by John Mavrak, President of Monopoly
Hotel Group, and was submitted to the city by Richard Myers,
developer of the Village.
Some of the items suggested for review and discussion
include a 1% or greater tax rebate for everything built on the
site, waiver of the traffic impact and utility tap fees, and a
reimbursement of plan review fees after the development opens.
A request that the city forgive a substantial portion
of the hotel and motel tax was also included, as well as a
suggestion that the city rebate to the hotel and spa developer
a portion of their sales tax equal to one percent of total
sales.
In
addition, a request for grant support for job creation and
employee training cost was suggested in the amount of
$1,260,000. Monopoly also requested that the city grant and develop a
monument sign for the hotel and spa which would be located at
Pleasant Run Road and State Highway 26, where the current
Village marketing office is located, as well as cooperation
for advertising and marketing. Approval was also sought to build to a height of 60 feet with
an underground parking garage. |
Monopoly
also sought a usage/support agreement letter from the city for
catering services and accommodation usage for community events
and meetings, as well as the consideration that the hotel be
appointed as the food and beverage concessionaire and provider
of housekeeping services for the City Hall and Library.
Click below to see proposal from Monopoly.
Page
One
Page
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In
an email dated October 9, 2001 to Mike Soab, Colleyville’s
Economic Development Manager, City Manager Bill Lindley
requested a copy of the city’s Economic Development Incentive
Policy. Texas law
allows municipalities
to offer economic development incentives, but the Property
Redevelopment and Tax Act requires that a city must first
establish guidelines that govern the consideration of such
incentives. However,
Colleyville does not currently have such a policy.
The city has never considered offering incentives to
developers in the past. Based
on the request from Monopoly, Colleyville city staff members are
now in the process of creating a resolution adopting such a
policy for the council to consider. A work session to discuss the initial draft of the policy was
to be held December 18, 2001, but the work session was cancelled
when it was discovered that the meeting had not been properly
advertised according to the Open Meeting Law.
To date it has not been rescheduled. |
| Lindley
also requested an estimate from Soab of the value of the various
items that Monopoly has asked for in their proposal based on the
information in a hotel study completed in early 2001. The city shared in the cost of a market study for a proposed
boutique hotel in The Village, prepared by HVS International on
January 26, 2001 for Realty Capital Corporation.
At that time the city and Realty Capital Corporation were
in discussion with another hotel developer, Sinclair Hotel &
Resorts, about developing in The Village.
However, Sinclair decided the project was not feasible
and did not proceed. In
his response to Lindley’s memo, Soab’s analysis of the
request for incentives shows that depending upon how one
interprets the requests, the total incentives requested could
approach $2,000,000 in the initial year of operation.
Click
here to see analysis of incentives requested.
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John
Mavrak of Monopoly met with city officials during the week of
October 8, 2001 to discuss the hotel and his suggested
incentives. Mayor
Donna Arp sent a letter to Mavrak on October 12, 2001
summarizing their meeting and the status of the hotel.
Click to see copy of letter.
Page
One Page
Two
In that
letter Mayor Arp mentioned the city was “ready to work towards
a ribbon cutting in the coming months”.
Ten days later the city issued a press release, in
conjunction with Realty Capital Corporation, that a major
economic development announcement would be made the following
day. Richard Myers
of Realty Capital Corporation and Colleyville Mayor Donna Arp
conducted the press conference.
No officials of The Monopoly Hotel Group were present.
Plans to
construct a $15,000,000 luxury, boutique hotel with
approximately 65 rooms and suites in The Village at Colleyville
were announced. In
addition to the hotel it was announced that residential villas
adjacent to the hotel would be offered for sale.
Although the press release referred to there being more
than 160 non-hotel residences in The Village, the original
zoning for the development limited that number to 100.
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The
letter from Mayor Arp to Mavrak also mentioned that the
incentives requested by Monopoly would be evaluated based on the
financial plans he was preparing for the city to review.
Those plans were expected by the city approximately 30
days following the initial meeting of October 8, and were
received in mid-December. The
size of the project, room rates and occupancy rates presented in
the Monopoly plans are identical to the ones in the HVS study.
Both plans indicate 60 rooms at an average rate of $250
to $280, with occupancy from 60% to 68%.
However, Monopoly’s proposal shows net income to be
more than double the amounts in the HVS proposal for the first
three years of operation. The HVS study shows net income of approximately $1.3 million
the first full year of operation, and $1.7 million and $1.9
million in years two and three.
The Monopoly plan shows $2.9 million in year one, $3.5
million in year two, and $4.2 million in year three.
The additional revenue categories include proceeds from a
French restaurant, banqueting, a spa and salon, health club
memberships, and fees associated with services for residential
customers.
In
a telephone interview two days after the press conference,
Mavrak told LNO that his group had not built any other hotels,
had not closed the sale on the proposed site, and that it was
undetermined whether or not they would close on the site prior
to receiving the needed zoning change.
The site in question is currently zoned Agricultural and
would need to be rezoned prior to any work proceeding. |
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