Terre Haute City Council OK's new hotel tax break

The tax abatement is for a new, $9.66 million Home2 Suites by Hilton being developed by Sycamore Hotel Partners near the intersection of Indiana 46 and Margaret Drive.

The company would have $1,463,490 in taxes abated over the 10-year period, while the hotel will pay the same amount, $1,463,490, in property taxes over the same period.

The council adopted a resolution in support of the tax abatement, but next month, it must still take additional action giving final confirmation, according to Michelle Edwards, chief deputy city clerk.

Those voting in favor were Norm Loudermilk, Neil Garrison, Don Morris, Amy Auler and Bob All. Those voting against were George Azar, Todd Nation and Martha Crossen. Jim Chalos was not present at the meeting.

The 4-story, 56,000-square-foot hotel, a Home2 Suits by Hilton, which would be located next to the Holiday Inn Express, is expected to open in 2017.

During public comment on the tax abatement, John Kite spoke for about 40 minutes, asking questions and raising concerns. He asked council members whether they have asked enough questions and whether they were acting too hastily.

The city is in financial peril, Kite said. “Why are we giving this money away?”

Garrison said he doesn’t view it as a glass half empty — as revenue lost or corporate welfare. Instead, “I tend to look at it as a glass half full.” Garrison said he looks at the tax revenue gained over time by granting the abatements. The city will eventually get the full amount of tax revenue.

Also, the hotel may prompt new development nearby, Garrison said. If Terre Haute stops granting abatements, it could lose new businesses to other communities that do offer them, he said.

Loudermilk pointed out that by the fourth year, the new development will generate $101,430 in property taxes. That’s something the city will not see if the hotel isn’t built. The incentive is important to encourage economic development in the area, and it occurs one step at a time, he said.

“If I can do anything on this council to vote to keep a job or to increase the employment of our community, I’m going to vote to do that,” as long as it’s not at the expense of someone else, Loudermilk said.

At one point, there was an exchange between Loudermilk and Kite, and council president Nation slammed his gavel down.

 “You’re making this out to be a lot more than what it is,” Loudermilk told Kite. There is no hidden agenda where “people are taking bribes” in exchange for a favorable vote, Loudermilk said.

Kite responded “I didn’t say anything about bribes,” and he apologized for the misunderstanding.

At one point, Nation then asked Kite to “wrap up” his comments so the council could move on. Soon, Loudermilk noted that council rules indicate those providing comment should be limited to three minutes and Kite had gone well beyond. Nation told Loudermilk his objection “is noted, but I’m the one who is running the meeting and I’ll allow this to continue for a little while longer.”

During council discussion, All said he views the tax abatement as “not so much giving money away ... it’s basically investing in the future.”

Azar said he previously voted no on a tax abatement for another hotel in that area along Indiana 46. “I had felt that area was going to develop no matter what we do,” he said. He’s voted in favor of most abatements in the city, he said.

Crossen said she had a concern about granting an abatement in a TIF (Tax Increment Finance) district. In an interview, she said it was a difficult decision, but because the property is in a TIF district, the city and taxpayers have already invested in infrastructure there.

“I think we need to be a little more careful in that case because there has already been a lot of tax money that went to building the infrastructure of that property so that it is attractive to developers, whereas, in a non-TIF district, that probably hasn’t taken place at the public’s expense, or at least not to the degree it has in a TIF district,” Crossen said.

The hotel, which would target extended-stay visitors, will include 70 standard-sized hotel rooms and 21 larger suite rooms. The new business would create 30 new jobs within the first year, with a projected annual payroll of more than $380,000.