In a recent Duncanville City Council meeting, Council unanimously approved a economic development assistance package of $295,000 to SWH Duncanville LLC for construction of a 65,000 sq. ft. hotel at IH-20 and Main Street in Duncanville. This assistance package represents a reimbursement of city development fees ($45,000) and 35% of the City portion of hotel/motel taxes not to exceed $250,000 over the next four years.
Why I supported this measure:
SWH Duncanville proposes to develop and operate a 101 room Hampton Inn and Suites motel. This company is involved with hotel properties in Grand Prairie, Decatur, Madill, OK., Bowie, Fairview and Coppell. An independent economic impact analysis was conducted on this initiative and the study revealed that the City would experience a 1.1 year payback period on its investment, compared to the standard 10 year payback period. Over a ten (10) year period, the City would experience a net benefit of $2,767,080.
SWH agrees to do the following:
(1) Build a 65,000 sq. ft. 101 room Hampton Inn and Suites Hotel with indoor pool,, fitness center and meeting area
(2) Must not be delinquent in payment of ad valorem and sales taxes
(3) The hotel must be constructed and maintained in accordance with all City codes and ordinances
(4) SWH must retain ownership of the entire hotel for a minimum of five years
(5) SWH or future owner must maintain the Hampton Inn and Suites flag for a minimum of 20 years subsequent to the agreement.
Additionally, during a recent Town Hall meeting on the budget, economic development was an area the attendees thought should be a primary area of emphasis.
It’s a good deal for the City!
3 Replies to “Feb 2016 Council Actions”
I just don’t see it! Why would the council approve a venture in these volatile economic times to put a business right in the middle of its competitors? Is the Hilton Garden Inn’s business overflowing? What about the motel to the West of the intersection of Duncanville Road and IH 20?
Granted, the City is only out $45K for development expenses; but, the 1.1 year payback is ludicrous. You are telling us nothing about the Opportunity Lost for the possible revenue that could have been obtained (100% of tax revenue not the 35% of tax revenue up to $250,000 for four years that was approved), if the business somehow manufactures itself. You are telling us there is a possibility of collecting tax revenues in excess of $714K from this venture in the next four years, maybe.
Am I not seeing the entire picture here?
Both the Hilton and the proposed Hampton hotel are part of a larger hotel chain, and both hotels believe that their businesses are complimentary,, not competitors. Also, please note that as part of the agreement, the proposed hotel must retain the Hampton flag for twenty years or the City gets its financial incentive back from whoever owns the hotel at the time. SWH Development is committed by agreement to own the hotel for five years. The opportunity cost for not doing this is difficult to determine given the fact that Duncanville’s core business is to provide services, and virtually all the services the City renders doesn’t generate a profit, nor is that the intent at the end of the day. Or if you’re looking at providing a rate of return on the money, please remember that a really good interest rate remains under 1% for the types of investments the City can legally invest in. On what basis do we deny the opportunity for investors to invest risk capital to add to the community’s tax base? Does this business fit the profile of a family friendly community, as opposed to a Hooters? In the case of the competition, that’s part of counting the cost that the owners have surely done in their analysis, given their experience in seven or eight other venues in this part of the country. No utility infrastructure to be provided here, so we get a welcome boost to the W&S bottom line. To me the ultimate benefit of this arrangement is the addition of tax base to help provide city services to our primarily bedroom community. Thanks for your input
Good job, Councilman Harvey, Council and City Staff! Duncanville’s strategic location is key to its high hotel occupancy, and these hotels provide beds for travelers, regional business and other activities, and especially for Duncanville sports and other City of Champions events, year round. Grant it, we need a balance of beds and other tax/income producing services and facilities. Let’s just make sure our proposed Comprehensive Plan provides this balance so the tax relief to Duncanville taxpayers is adequate, and the net income to the City will pay for adequate services and infrastructure improvements, replacement and maintenance. Our quality of life can be enhanced in many areas, so that all our citizens and others want to call Duncanville their home!