Greensboro Hotel Incentive Keeps Handouts Flowing | Eastern North Carolina Now

    Publisher's note: The author of this post is Sam A. Hieb, who is a contributor to the Carolina Journal, John Hood Publisher.

Luxury Wyndham hotel offers uncertain benefits to city's bottom line

    GREENSBORO     Get in line in Greensboro. They're handing out money and they're not saying no. That's not just the view of a few cynical observers. One City Council member expressed that sentiment during debate over a $1.9 million incentive for a proposed $40 million downtown hotel.

    Council member Marikay Abuzuaiter referenced a letter she received from the local hotel and motel association voicing opposition to the incentive.

    "They said, 'please don't this, you would set a precedent where tax money will be going to everyone who lines up, and you won't be able to say no,'" Abuzuaiter said.

    But the council didn't say no to this request, voting 6-3 to approve the incentive, with council members Abuzuaiter, Zack Matheny, and Tony Wilkins voting against it.

    "You can't tell me $1.9 million is a deal breaker on a $40 million project," Wilkins told Carolina Journal. "I don't see how this is fair to the other hotel owners who didn't ask for an incentive."

    Even some supporters of the measure weren't wild about it, but they saw few alternatives. Council member Mike Barber said, when voicing support for the project, that Greensboro was competing with hundreds of other cities offering similar incentives to spark economic development.

    "Don't hate the player  -  hate the game," Barber said. "It's the environment we're in. Sometimes we have to look at it and smile and sometimes we have to hold our noses."

    It's not as if people are shy about asking city government for money, because the hotel incentive is not the strangest request the City Council has received within the past year.

    In June, the local production company Black Network Television asked the previous City Council for a $300,000 loan to help produce a sitcom titled "Watcha Cookin," which BNT hoped to get into syndication.

    The council went for it, too, but reversed course when city staff discovered BNT owners Michael and Ramona Wood had a second mortgage of $975,000 on their home that had been pledged as collateral.

    (BNT has since threatened to sue the city, claiming the vote to deny the loan was politically motivated and possibly racist.)

    This is also not the first proposal for a downtown Greensboro hotel. A few years ago a deal to build a hotel on Elm Street using federal stimulus funds created a buzz  -  mostly because the site was being brokered by then-Guilford County Commissioner Skip Alston. But that deal lost steam when the deadline to apply for federal funds came and went.

    And developers of this latest downtown hotel project initially were asking for more than the $1.9 million in incentives, which would take the form of tax breaks over six years.

    Developers also wanted the city to build and then lease a 100-space parking deck beneath the hotel.

    But that request was more than even the City Council could stomach, so it was pulled from the request.

    Plans call for a 168-room hotel under the Wyndham banner. Wyndham already has an association with Greensboro through its sponsorship of the PGA event the city hosts in August.

    That existing relationship is what would make the downtown hotel successful, said Greg Dillon, one of the hotel's developers.

    "This new, full-service luxury hotel aligns nicely within the current market requirements for Greensboro," Dillon told the council. "The hotel will complement the Wyndham championship and its activities and provide support for the ACC Tournament and other sporting and cultural activities in Greensboro. We envision it as being part of the heart and soul of Greensboro."

    The proposed incentive states the hotel would not receive any tax rebates until it was up and running and had filled the expected 169 jobs.

    The hotel also would create 230 construction jobs, developers said.

    Randall Kaplan, managing partner of the downtown Empire Room, which would be part of the new hotel, said the incentive request was different because the hotel wasn't asking for a loan or a cash handout.

    "If this was just money being given by the taxpayers to try to get a project done, I might say this isn't a great idea," Kaplan said. "But that's not really what's happening here. If the hotel doesn't get built, there will be no additional taxes to the city."

    There is one catch, however. Assistant City Manager Andy Scott  -  who oversees economic development projects  -  told the council the city "does not statutorily have access" to two sources of tax revenue  -  the hotel-motel tax and downtown business development taxes. Revenue collected from those taxes are designated for specific purposes and not available for the city's General Fund.

    "So if you move forward with this, the city would fund the difference of the money collected from those two taxes from the parking fund," Scott told the council.