Developer seeking incentives to build new hotel in downtown Ogden
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OGDEN — A local developer is seeking nearly $1.8 million in tax incentives to bolster a project that would bring a new hotel to downtown Ogden.
Ogden City’s Redevelopment Agency board, (which is made up of the seven members of the city council) is mulling a proposed “Participation and Incentive Agreement” with Garn Development Company, LLC. The agreement would authorize $1.77 million in tax increment incentives to offset costs associated with building a Hilton TRU/Home2 Suites hotel near the southwest corner of Lincoln Avenue and 24th Street.
The hotel would have approximately 150 rooms, according the Ogden Deputy Director of Community and Economic Development Brandon Cooper, and an existing building and parking lot at the location would have to be demolished prior to construction.
Under the agreement, Garn would receive 11 annual tax increment payments from the city, from 2022 to 2032, not to exceed the $1.77 million threshold.
Tax Increment Financing involves freezing tax valuations on a property for a specified time period, then using future increases in property tax revenue for redevelopment. The money is often offered to developers as an incentive to build and it can be used for things like street and utility improvements, hazardous waste removal, property acquisition and the demolition of blighted buildings.
As part of the deal, the hotel would have to be substantially complete by June 30, 2021.
Cooper said the new hotel rooms are needed in the Ogden marketplace and the project likely wouldn’t be feasible without the incentive agreement. Cooper said in many cases, high costs associated with demolition, environmental remediation and the construction itself, limit the possibility of strictly private market development in Ogden.
“The only two ways that really make a project work is having a reduced land costs, or higher rents,” he said. “In our case, we don’t have land that is that much cheaper than other areas and we don’t have rents that are that much higher than other area. We’re really stuck in that quandary of projects being infeasible to get constructed unless there is some public participation.”
The proposed hotel site is inside the city’s Kiesel Community Development Area. The CDA, which encompasses approximately 39 acres between Kiesel and Wall avenues from 24th Street to 25th Street, was approved by the RDA board in 2015. The CDA creation authorizes up to $10.4 million in TIF money to be used for redevelopment in the area.
The principal of the Garn development company is Kevin Garn, a Layton resident and former Republican majority leader of the Utah House of Representatives. On financial disclosure reports, Garn was listed as a donor to the reelection campaign of Ogden Mayor Mike Caldwell. Garn donated $1,000 to the campaign.