New hotel expected to improve financial situation for Downtown TIF
By Brandi Makuski
A new downtown hotel will break ground on Sept. 22.
Cobblestone Hotel & Suites — which has an address of 1117 Centerpoint Dr., was approved for construction by the city in July.
The four-story, 61-unit hotel is the latest from the Neenah-based Cobblestone Hotels Development LLC, which has multiple properties in Wisconsin including Oshkosh and Neenah, will be constructed on what is currently parking lot space between Shopko and Mid-State Technical College.
In the building’s northwest corner, the hotel will house the Wissota Chophouse, which will feature Angus steak and over 50 beer selections.
“I think everyone is very excited about this project,” Mayor Mike Wiza said of the project.
Comptroller-Treasurer Corey Ladick is also pleased with the project, saying the increase in tax base alone will be an improvement for the Downtown TIF (tax incremental financing) district, which has been under financial strain for some time. Created in 2006 under Mayor Gary Wescott, the downtown area was deemed as a “Rehabilitation District” based on findings that at least 50 percent of the real property was in need of rehabilitation or conservation work.
While several downtown buildings have improved their exterior facades, and other projects are nearing completion — to include the restorative 1055 Main St. project — the district is still unable to pay off its debt.
“The only thing that has improved is, it was under its starting value for a while, and it’s not under its starting value anymore,” Ladick said of the Downtown TIF, known as TIF No. 6. “It was generating some increment due to recovering property values citywide; especially with the economy starting to turn around a little bit, property values have gone up citywide. But it’s just not enough to pay all its bills.”
The TIF was about $2.8 million in debt at the beginning of 2015, according to Ladick’s presentation to the finance committee in April, and ended the year with a negative balance of $4.2 million. At that time, the city was transferring available funds from other TIF’s to help pay off district’s $7.1 million debt, which comes largely in the form of the downtown square and mall redevelopment project, which was completed in 2011.
“We’re still having to levy tax dollars to support this TIF district,” Ladick said in April. According to current city records, taxpayers subsidize the TIF by $368,000 annually, with total debt repayment for the district totaling $830,525 for 2016.
The hotel project will alleviate some of that levy burden, he said, by about one-third. As part of the developer’s agreement, the new hotel has guaranteed a minimum tax payment of $102,500 for the first 11 years of its operation.
And that doesn’t include room tax, Ladick said. The city is estimating an annual payment of about $89,000 in room tax from the hotel. The city already takes in about $750,000 annually in room tax, 70 percent of which goes towards tourism promotion.
“It is the worst TIF based on financials,” Ladick said. “Hopefully, we could see some additional new development in that district to help it out.”
The ground-breaking will be held at 9 AM on Thursday at the site. The public is welcome to attend.