Gretna has begun the process of creating an economic development district encompassing what is expected to become a three-hotel complex on 11 acres the city annexed from Jefferson Parish last year.
Under a financing mechanism the City Council will vote on next month, three revenue streams from the development underway just north of the West Bank Expressway would fund up to $2 million in infrastructure improvements to the site.
Those revenue sources would be money collected from the site under an existing 2 percent tax on all hotels in the city, an additional 2 percent tax to be levied only on the hotels at that site and any annual property tax revenue from the site above $22,000 — the amount the city got from the land before the current development got underway, Gretna City Attorney Mark Morgan said.
If the financing arrangement is approved next month, the council would vote at a later meeting on a cooperative endeavor agreement with developer Bui Nguyen’s BN Management to complete the deal.
As BN Management installs lights and streets and does drainage, water and sewer work, it could apply to the city for credits from the tax revenue, which would be placed in a trust fund.
In addition to being capped at $2 million of infrastructure work, Morgan said, the agreement would end in a maximum of eight years, whichever comes first.
After that point, the trust fund would dissolve, property tax and the existing 2 percent hotel tax would be collected normally from the development and the additional 2 percent hotel tax would be dropped, he said.
Construction of a four-story, 123-room Courtyard by Marriott is underway and should be finished in the fall, and Nguyen reportedly has an agreement for a Homewood Suites by Hilton to follow.
The vision for the development from the beginning has been three hotels, along with restaurants and small retail development, although Mike Sherman, the development’s spokesman, could not be reached Thursday for comment on the latest plans.
Like the decision to annex the property from the parish, Morgan said, the city views the incentive package as a crucial tool to getting the land developed.
“There were 11 or 12 development attempts that failed on this property over the last 30 years,” he said, echoing arguments made by the developer, the council and the parish in late 2013 that the parcel’s development has been stymied by its lack of infrastructure.
The creation of the development district, he said, “is what’s making this happen.”
Asked if there are any revenue projections or a cost/benefit analysis supporting the plan, Morgan said the property tax revenue alone from the planned $50 million development would be about $200,000 per year. With the increase in hotel tax collections and sales tax collections, the city expects to recoup a $2 million investment easily, he said.
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