Marble Falls grants hotel occupancy tax abatement for conference center hotel
Marble Falls City Council granted a $ 300,000 hotel tax rebate for the next 25 years for the Marble Falls Hotel and Conference Center project at its meeting on Tuesday, October 19. The abatement is a demonstration of the local support needed for the project, which will be funded, owned and operated by Marble Falls Hotel Group LLC.
The project consists of a 123-room Tapestry by Hilton hotel and conference space that will be built on approximately 3 acres of land along Yett Street and Marble Falls Lake. Moving the project forward is one of the main goals of the Marble Falls Economic Development Corp. since 2014. The hotel’s conference center is expected to open in the first quarter of 2022 and open by mid-2023.
âIt’s almost moving to see this on the agenda,â Councilor Craig Magerkurth said at the meeting.
Hotels, motels, inns and bed and breakfasts located within city limits are required to pay 7% hotel occupancy tax to the city each year. The revenue from these taxes is used to support qualified events, activities and facilities that promote tourism and overnight stays in Marble Falls.
On several occasions during the meeting, Councilor Dee Haddock made it clear that apart from granting an allowance, the city will not contribute taxpayer money to the project.
The rebate will reduce the hotel group’s annual payment to $ 300,000 over the life of the agreement, said Christian Fletcher, CEO of EDC. Once expired, however, the city will begin to receive the full amount of tax revenue generated by the project, which is estimated to be around $ 614,000 at that time.
âIt was the first thing (Marble Falls Hotel Group LLC) asked for,â said Fletcher. âThis is a very common source of income for these types of projects because it matches the legal requirements for how you can spend hotel tax money. ”
The conference center hotel is expected to generate approximately $ 278,000 in hotel occupancy taxes in its first year of operation.
The group is also seeking an ad valorem tax abatement of 75 percent over 10 years from Burnet County.
âWe will be working on a few points related to the design and closure of the land, but we will probably not finalize the lender’s situation until we have confirmation of the county’s involvement,â Fletcher said in a statement.
The Marble Falls Hotel Group LLC consists of Phoenix Hospitality Group, a hotel management and development group, and Hawkins Family Partners LP. The group is financing the project, which is estimated to cost $ 36 million when completed, through a 50 percent loan and equity. Marble Falls EDC is also contributing $ 6.8 million, coming entirely from the proceeds of the 2016 bonds that were spent on the project.
Although EDC has helped facilitate the completion of the project over the years, it does not own or operate the hotel and conference center.
The board also approved a performance agreement and a non-exclusive lease and management agreement between Marble Falls EDC and the hotel group during the meeting. EDC directors previously gave their preliminary approval to both deals at a special meeting on September 27.