After the lawyers work out the final wording, a proposed hotel at 139 North Glynn Street would be able to get tax breaks in the city’s Tax Allocation District. The project is being developed by Steve Gulas and would bring 80 hotel rooms to downtown Fayetteville.
Above, Brian Wismer, Fayetteville’s interim director of economic activity. File photo.
Interim Director of Economic Development Brian Wismer explained the application includes a project analysis performed by the Bleakly Advisory Group.
Based on their review, the project will likely generate an increment of $1.452 million over a 20-year term. This forecasted amount is just slightly less than the applicant’s initial request, but they have agreed to this revised amount. Per the Bleakly analysis, the parcel’s full increment created from this project annually is estimated to be approximately $56,000 with 2 percent annual appreciation over a 20- year term. The funds would be reimbursed annually on a “pay-as-you-go” basis, which is the city’s preferred method of TAD financing. He further explained the “pay as you go” basis.
“Basically, the property owner pays the full assessed value to the Tax Commissioner like everybody else. A portion of that property’s assessment is frozen at a fixed dollar amount, and is the same every year. The Tax Commissioner sends that frozen portion to the three taxing entities (city/county/school board). The difference in the frozen assessed value and the current assessed value (called “the increment”) is deposited into the city’s restricted TAD account. The city will in turn, reimburse the property owner the full amount of the increment on an annual basis. This happens until the 20-year term is reached, or the maximum agreed upon dollar amount is reached, whichever happens first. Only the increment generated from this parcel will be eligible for payment to the project, with the payment risk being fully borne by the applicant,” he said.
Wismer said the project will incude architectural upgrades and improvement for road entryway. The developer would also build a 750 sq. ft observation deck on the rooftop that could be used for special events and dedicate the road to the city, in case the city decides to do the Lafayette Avenue extension across Glynn Street.
He added, “There is no risk to the city, because the burden is on the developer to complete the project. If not, the transaction would not move forward.”
The applicant has to go through the site plan review and approval process with Planning and Zoning in March or April. Gulas had been seeking variances, but said the variances are no longer needed after making adjustments to the site plan.
The City Council voted unanimously to moved forward with the TAD application.