Slidell took an initial step Tuesday toward creating an economic development district to facilitate construction of a new Holiday Inn Express that a Mississippi developer plans to build off Northshore Boulevard in an area that already has three hotels. Whether it will take further steps, however, was unclear.
The City Council voted 7-1 for a resolution to advertise its intention to create the district, which would enable MY Investments to recoup up to $1.7 million of the $7.5 million it estimates it will spend to build the 80-room hotel. Councilman Sam Abney cast the lone dissenting vote; Sam Caruso was absent.
If the council eventually votes to create the district, the $1.7 million would be recovered through a 2 percent sales tax and a 2 percent hotel occupancy tax that would be levied at the Holiday Inn Express for 20 years or until the costs are met, whichever comes first. The tax revenue would be used to offset the infrastructure costs the developer will bear, which include building a road to access the parking lot and moving a gas line, attorney Dannie P. Garrett III said.
Several council members expressed reservations, asking whether granting the request would cause the city problems with other businesses and whether the city will face a proliferation of similar requests.
Councilman Joe Fraught, who represents the area in question, said nearby hotels that didn’t have the benefit of a taxing district will likely have a problem with the city granting this one, even though they will be charging significantly lower taxes than the planned inn.
If every development that comes to Slidell wants a similar arrangement, he said, “I don’t think we can continue on that path.’’
Councilman Bill Borchert told Garrett that Slidell will require 100 percent of the tax money to be spent on public infrastructure such as streets, drainage and lighting. “I want to make sure you’re aware of that,’’ he said.
Borchert said it’s time for Slidell to discuss some guidelines related to such special tax districts.
The area in question already has several hotels, he noted. “It doesn’t make good sense,’’ he said.
But Councilman Jay Newcomb said the council needs to keep an open mind. The other hotel developers didn’t ask for an economic development district, he said, and it’s not fair to penalize this developer for doing so.
Garrett said the additional tax that will be collected will put the new hotel at a competitive disadvantage, but that the developers believe it will be successful.
MY Investments, which is based in Vicksburg, has built 40 hotels— 15 of them with tax district financing — and has eight under construction and another 14 in planning, he said.
The developer builds and operates its hotels under national flags rather than building them on its own and “flipping” them to a chain, he said. The firm looks for under-served markets and not areas where a new hotel would simply be taking customers away from other inns, he said.
The developers believe that 85 percent of the planned Holiday Inn Express’s customers will be new to Slidell, Garrett said. Most people who stay in national flagship hotels like this one are looking for that particular brand and will stop there if one is available or keep driving down the road if not, he said.
The attraction of this site is its proximity to Interstate 12, he said.
He said the project would create 25 to 40 full-time and part-time jobs, not including construction jobs. There’s also the possibility of a second phase that would include a Marriott Courtyard and banquet hall, he said.
But if the idea of a new hotel didn’t get all council members excited, the prospect of a new corporate headquarters did. Garrett said the company is considering moving its headquarters to Louisiana. Fraught said Slidell would be very interested in that.
Editor’s Note: This story was altered on April 23, 2014 to correct the number of hotels MY Investments has under construction from 80 to eight.