Proposed Terre Haute Marriott hits tax abatement road block
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A Terre Haute hotel project failed to receive city council approval for a tax abatement Thursday night after councilors felt uneasy about the development’s projected job salaries and need for an abatement. The measure needed five “yes” votes to pass and failed by a vote of 4-3.
Council members were not dismissive of the project but questioned the parameters of the abatement and wanted more reflection and potentially some amendments before moving forward. The matter could be considered again for the first of two approvals at the council’s June 6 meeting.
Lafayette-based developer Transcend Group is seeking to invest $9.5 million and build a TownePlace Suites by Marriott in an underdeveloped neighborhood near I-70. Transcend is seeking a nine-year property tax abatement amounting to about $1.1 million.
Richard Shagley of the firm Wright, Shagley & Lowery represented the developer and said he did not know if the project would occur without the abatement.
The extended-stay hotel is one of several hotel developments popping up around downtown as the city gears up to hold larger events at its convention center and welcome more visitors overall.
“We have a hotel shortage,” Shagley said during the meeting. “And the petitioner here tonight is trying to help that situation.”
The hotel is estimated to have 96 rooms, as well as an indoor pool and fitness center, according to the city documents. Local general contractors would be used, Shagley said, as well as the local workforce. If greenlit, the project would kick off construction in October with completion in two years.
The hotel is also projected to have 18 employees with a total annual payroll of $540,000—an average of $30,000. Reflecting on the area and the desire to boost residents’ wages, Councilor Kandance Hinton, who presides over the project’s district, said the wages are too low considering many would likely make under that average.
“I’m excited to see Towneplace Suites and Marriott interested in that area,” Hinton said during the meeting. “However, I too have a hard time giving Marriott a tax abatement.”
Council members drew pause regarding the area and lot slated for the development and questioned the amount, time frame and other abatement specifics. The lot is currently vacant and valued at $52,000. It was previously the location of another hotel that has since been torn down.
“That is, in my mind, two strikes against this project,” Councilor Todd Nation said during the meeting. “It’s in a place where it doesn’t need to be incentivized, and the kinds of jobs they are delivering are not the jobs that I would give up—third strike—a million dollars of the taxes the city would otherwise collect.”
Nation explained his issue with the tax abatement, including low salaries and how the site does not warrant an tax reduction.
Shagley rebuffed the council members’ concerns by saying the owners are local and that Marriott is a high-end giant in the hotel industry. He also repeatedly brought up that similar abatements, specifically with a La Quinta Inn & Suites by Wyndham, have been passed previously without as much scrutiny.
“I also lean towards if you can give it to La Quinta, why can’t you give it to Marriott?” Shagley said. “We’re asking to be treated like other hotels you’ve treated in the past.”
Councilor Tammy Boland said a past council granted the tax abatement for the La Quinta project, noting that precedent does not hold up for new members.
The council has also seen this proposal before but was denied because the developer didn’t have a branded hotel committed to the project.