Purpose of an incentive to lure business part of the question
The role of tax incentives when no coaxing is needed to secure a project is a question up for discussion by the Jefferson city council following a presentation Tuesday evening by Jeremy Griesbach, representing BriMark Builders and Cobblestone Inns, and Wild Rose president Tom Timmons. Griesbach was at the council meeting to learn if the council’s offer of an $800,000 tax incentive, made before a casino became part of the development, is still available.
The Cobblestone Inn project was initiated before talk of a possible casino was public. BriMark planned to build a 36-room hotel with a banquet facility for 300 people in the industrial park owned by Greene County Development Corp south of Syngenta. The area is in a large TIF (tax increment financing) district that extends north of the railroad tracks to the city limit, allowing the council discretion in using the additional tax garnered from development of the property. Offering a rebate of a portion of the property taxes is a commonly used incentive to lure new development. The incentive offered to BriMark was $800,000 over 15 years.
BriMark put the project on hold when Wild Rose entered the picture. The two companies agreed that should the casino project move forward, BriMark would build a 71-room Cobblestone Inn attached to the casino, and Wild Rose planned to include a much larger banquet/convention facility in the casino than Cobblestone had planned.
Cost of the original, smaller hotel was $3.5 million, with local investors involved. Cost of the larger hotel is $5.5 million, and Griesbach is still looking for the last part of the funding. If the TIF is approved soon, ground will be broken on the hotel this fall and construction will be done in time for the casino opening next summer.
The question about a tax incentive for Cobblestone comes from the fact that in Wild Rose/Grow Greene County’s application for a gaming license, Wild Rose stated it would build a hotel with or without an operating partner – with or without BriMark – as city administrator Mike Palmer pointed out at the meeting.
Timmons said Tuesday that should BriMark pull out of the project, another hotel company has expressed interest in the project, or that Wild Rose would build and operate the hotel. That would delay the project.
City attorney Bob Schwarzkopf played devil’s advocate. “I think the council has to be sensitive to taxpayers when they’re using tax dollars. They have to have a public purpose in doing that, and usually when you give grants for economic development you’re doing it to induce or make someone do something they otherwise wouldn’t do,” Schwarzkopf said. “Here, it appears that Wild Rose told the Gaming Commission there’s going to be a hotel there, whether or not there are incentives. So how does the council justify to the taxpayers ‘we’re going to use your tax dollars for something that’s going to happen regardless’?”
Timmons answered that BriMark has doubled the size of its hotel without asking for additional tax incentives. “If it was a good deal then, it’s a good deal now,” Timmons said.
Public purpose: Local banker Ben Yoder was at the meeting and spoke from the audience about the public purpose of the project. He explained that because local investors are involved in the Cobblestone project, there is an incentive to participate. He noted that even with a portion of the property tax given back to BriMark, the city would have tax revenue it does not have now, and that taxes would be collected on water and sewer use. He spoke of increased employment that would benefit the community, an increase in the hotel/motel tax collected, and an increase in tourism.
“If we’re visionary, down the road – the purpose of the casino may be an issue for some – but even if it’s not, there are other businesses coming to town. The issue is what incentives do we give them to help provide that issue of bringing jobs and those things to town? With a public-private partnership you’re able to provide for all of that, to provide some public financing that will make that happen. Cobblestone would still pay real estate tax. What they’re asking is that the city redirect some of that money so they can make that investment to make that happen.”
Councilmember Lisa Jaskey spoke several times in support of the casino/hotel project. She noted the 75 percent approval vote in the gaming referendum a year ago, and that many of the people who spoke at the Racing and Gaming Commission’s public hearing in May talked about the need for a conference center and hotel rooms.
Councilmember Shannon Black also spoke in favor of the project, calling it a “worthwhile project.”
Councilmember Gary Von Ahsen asked for verification of separate ownership of the casino and the hotel. He was the only councilmember to go on record last summer in opposition to the casino.
Councilmembers Larry Teeples and Harry Ahrenholtz made no comments and asked no questions during the presentation.
Wild Rose Jefferson is being built at the intersection of Highways 4 and 30 without any financial incentives from the city. The city is paying to extend water and sewer service to the site (see related story), but there will be no tax abatement or TIF rebate on the property.
The matter of an incentive for BriMark Builders will be on the city council’s Sept. 9 agenda. It was listed only as a discussion item Tuesday. ~by Victoria Riley
