The next chapter for a nearly century-old building in downtown Baton Rouge came into focus Wednesday: The former State Office Building on Third Street will become a hotel.
Developer Mike Wampold revealed his plans for the 12-story art deco building by asking legislators to divert a portion of sales or hotel taxes for several decades to pay for the renovation. He said the interior will be gutted and converted into 146 hotel rooms.
“It’s impossible to make it work with the downtown room rate of $125 a night, so we’re asking for some help from the state,” he told the Senate Finance Committee during testimony on Senate Bill 648.
The committee advanced the bill after ejecting a would-be hitchhiker.
A committee member tried — and failed — to add a St. George angle to the legislation.
SB648 would create the Old LNB Building Redevelopment District as a special tax increment financing distric.
TIFs are popular ways to help pay for development. They divert tax revenue, allowing developers to use the proceeds to fund the development.
An analysis by the Legislative Auditor’s Office outlines how the TIF would work if the hotel generates $611,000 in sales and hotel tax revenue a year, as expected. The development would keep $335,000. The city-parish would get $276,000 in dedicated tax revenue.
The development also could charge additional taxes.
State Sen. Sharon Broome, D-Baton Rouge, told committee members Wednesday that the state has no tax revenue at stake.
“That’s one of the main points. There’s nothing for us to lose as a state if we and you committee members say ‘yes’ to this,” she said.
Downtown Baton Rouge has 820 hotel rooms, and an 89-room Holiday Inn Express is set to open at the end of the year in the old Baton Rouge Savings & Loan building on North Boulevard.
Davis Rhorer, executive director of the Downtown Development District, has said his goal is to get 1,000 hotel rooms downtown. “That gives you lots of possibilities for convention center business,” Rhorer said in 2010.
In 2008, the late Brace Godfrey, whose Cyntreniks LLC firm developed the Hotel Indigo, said a market study showed sufficient demand for 1,100 more hotel rooms downtown.
Rhorer told the committee Wednesday that the highest and best use of the River Center requires a number of rooms within walking distance. He said it’s been a journey to build up the downtown area.
The Baton Rouge Area Foundation bought the old State Office Building from the state for $10.25 million. Wampold later purchased the 1925-era office building.
The building housed Louisiana National Bank and state offices. Wampold said he will need to demolish the interior of the building.
Construction is expected to start by the end of the year and wrap up by the end of 2015.
Before the committee could vote on the bill, state Sen. Bodi White, R-Central, offered an amendment to set up a similar structure for the proposed city of St. George. White recently lost a bid to advance legislation creating a municipal framework in case unincorporated parts of East Baton Rouge Parish become a new city.
The defeat of White’s bill didn’t kill the St. George efforts. However, it makes things a little messier for the transition should St. George be approved by voters in November. The legislation was supposed to smooth the way for the unincorporated areas to break away by setting up a municipal framework.
SB648’s sponsor, state Sen. Yvonne Dorsey-Colomb, chairs the Senate committee that killed White’s bill.
White said Wednesday that he is happy for Wampold to take taxes for 30 years in order to pay down bonds on the downtown Baton Rouge hotel. He said his amendment would create a taxing district for St. George.
“My committee gave you a fair hearing. I don’t want to debate that bill in here,” Dorsey-Colomb told him, questioning whether the amendment even pertained to the same subject matter.
White assured her the two issues were in the same section of state law.
“They’re in different sections of town,” Dorsey-Colomb retorted, promising to back a TIF for White should St. George ever become a reality.
State Sen. Fred Mills, R-St. Martinville, said he felt caught in an uncomfortable situation. “I feel like I’m at a family fight, but I love them both,” he said.
Senate Finance Committee Chairman Jack Donahue, R-Mandeville, brought the discussion to an end by shooting down White’s amendment.
Advocate news reporter Timothy Boone contributed to this report.
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