06/25/1980 Meeting - Laserfiche WebLink

Home Browse Search

L Mr. Obie stated he feels the assumptions are basically right and thinks the schedule is the way ,to develop the formula. The council should be aware that . they are acknowledging a commitment of 40 percent of the room tax funds of that hotel~for 75 years. He asked Mr. Long if the answers given are satisfactory in regard to legal concerns. Mr. Long responded that the memo to which Mr. Richards responded was provided in May and the changes are based on the second draft and represent some improvements. The policy questions and risk sharing seem to be the same as they were previously. The possibility of receiving an additional one percent of the gross after 31 years and six months is not a traditional escalator provision. The agreement responds to most of the tech- nicalquestions their office had~ but not whether it is a good deal or not, Mr. Obie stated he feels confident that it as close to putting together a hotel as they can come at this time. This is a paCkage and council needs to decide if they want it. It would appear that the potential bail-out feature~ which would be triggered by the council~ would limit the liability to a $200,000 per year subsidy and then the council can decide if they do not want to spend more than that. Some subsidy is in the public interest since the project provides meeting rooms and economic benefits. He would like to request that the County join with the City and contribute 40 percent of their room tax funds since they would probably use the facility also. With the letter of intent of good faith and the bail-out feature he would recommend that this be approved. Ms. Smith stated she is not certain the original room tax ballot measure would support the notion that 40 percent of the room tax generated from that hotel would be allocated to the project and she does not want to go ahead with that unless there is strong support for it. Mr. Henry stated that within the present resolution, 40 percent of the net room .-. tax receipts for the City as a whole are going into the Performing Arts (Civic Center) development. The resolution does not distinguish between the conference center or the Performing Arts Center. The 40 percent of the room tax generated by the hotel will be revenue to the City and could go to the conference center. The other 60 percent could go to the performing arts groups~ the Convention Bureau, and special projects or facilities. Ms. Smith noted she did not see this as being a problem~ she is just concerned that the action be appropriate. She wants to make certain the procedure is correct. Mr. Long stated there is a legal requirement that any revenues pay convention expenses. There is no legal requirement that the 40 percent of room tax go to the conference center. Mr. Lieuallen asked if the developer is counting on the room tax being part of the arrangement and Mr. Kupper responded that they are not. Mr. L ieuallen said he agrees with Ms. Smith and Mr. Long that the current resolution is very broad and Mr. Henry's interpretation is debatable. Mr. Long then asked if 100 percent of the room tax monies from the hotel could be directed back. Mr. Kupper responded that they could be. Mr. Delay congratulated the Renewal Agency for a job well done. He said he feels the council has failed by not getting involved in the process. There is a potential for negotiating a different kind of agreement, but the council is not in a position of being able to deal with this question now. There are two perspectives from which this agreement can be viewed, by the private developer . 6/25/80--8