Council OKs Tax Breaks For 2 Worcester Hotels
Courtesy of the City of Worcester
A rendering of the CitySquare site. The $28 million, 158-room Renaissance by Marriott Hotel will occupy the site in purple, while a $60 million, 350-unit market rate housing complex would occupy the site in orange. In 2013, Saint Vincent moved into the site in light pink and Unum moved into the site in yellow.
The City Council unanimously approved tax breaks Tuesday for a $38 million project to build two Downtown area hotels -- a Renaissance by Marriott at CitySquare and a Hampton Inn at Gateway Park.
The 158-room Renaissance by Marriott would create the equivalent of 90 full-time jobs, according to plans filed by the developers, while the 100-room Hampton Inn would create 30 full-time equivalent positions.
The city’s economic development committee approved the tax increment financing (TIF) agreement Monday night, sending it to the full council for a vote.
“I wasn’t 100 percent happy with it (the TIF), but I was a pragmatist,” Councilor Frederick Rushton, chair of the economic development committee, told the council Tuesday. “Ultimately, people do want to see downtown become an 18-hour city.”
Developer Colwen Management already manages the Residence Inn and Courtyard by Marriot in Worcester, and said it would only move forward with construction if both the Renaissance and Hampton Inn were approved.
Rooms at the Renaissance would average $150 per night, and the hotel would offer 6,400 square feet of meeting space, a restaurant serving lunch and dinner, a breakfast lounge and bar, a pool and a fitness center. Sixty-one of the hotel’s employees are expected to make $20,000 to $30,000 annually, 12 would make roughly $30,000 annually, six would earn $40,000 to $50,000 each year, and 11 would make $50,000 to $100,000 annually, according to Colwen.
The 10-year TIF for the Renaissance calls for a $325,000 annual payment for each of the first five years, with payments escalating by $50,000 for each of the last five years. Construction is slated to begin on the corner of Front and Trumbull streets in spring 2015, with the Renaissance scheduled for a late summer 2016 opening.
In total, the city would collect $4 million in the hotel’s first decade of operation.
Rooms at the Hampton Inn would run $100 per night, and the hotel would offer a meeting room, a lounge with limited food service, a pool and a fitness center. Twenty of the hotel’s employees would make $20,000 to $25,000 annually, four would make $25,000 to $35,000 each year, two would earn $35,000 to $45,000 annually, and four would bring in $50,000 to $75,000 each year, Colwen said.
The seven-year TIF for the Hampton Inn would exempt Colwen from 35 percent of its $2.46 million tax bill over that period. Construction would begin at Prescott and Faraday streets in spring 2014, with the hotel set to open in summer 2015.
Under the TIF, Worcester would collect $1.52 million in the first seven years after the hotel opens.
Upon completion of the TIFs, the property taxes generated from the two hotels will exceed $900,000 annually.
“The fate of both hotels lies with the ultimate approval of a tax relief deal with XSS and its subsidiaries,” wrote Tim McGourthy, the city’s chief development officer, in a six-page letter to the council. “Tax relief is essential to overcome the hurdles inherent in developing a new hotel.”
McGourthy told city councilors that a $60 million proposal to build 350 units of market-rate housing and 15,000 square feet of retail space at CitySquare will move forward only if the adjacent hotel is approved. Talks with a prospective residential developer are underway.
“I think this is an all-out win for the city of Worcester,” McGourthy said.
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