Development agreement is amended
A development agreement between the city and Batra Hospitality has been amended.
When the Common Council met on March 20, it voted 10-0 to reduce Batra Hospitality's development agreement value by $339,300.
Jay Batra, of Batra Hospitality Group, purchased the Best Western Grand Seasons Hotel last May and requested the amendment.
The facility is tied to two development agreements that were entered into by the city with the previous owners.
Under those two development agreements, the previous owners agreed to a combined increase in assessed value of $1 million.
In exchange for that development commitment, the city provided a total development subsidy of $147,500 for the two agreements.
One agreement was entered into in July 2002, while the other was in September of 2003.
Since those agreements began, the city has collected $429,300 above the city subsidy of $147,500.
That total income above the city subsidy includes both new increment taxes and paid penalties.
In each of the last five years, the project was under the development target by about $300,000. The annual penalty amount was about $8,000. All of the penalties were made current when Batra purchased the property.
Batra requested an amendment to the development agreement to account for the loss of assessed value from the sale of 1.56 acres in December of 2005 to the owner/developer of the strip mall that is in front of the hotel.
The previous owners sold that property in December of 2005 for $470,000. Currently, the 1.56 acres are assessed at $396,600.
The Common Council is recognizing a reduction of $339,300, because there is an increased value in personal property that needs to be taken into account, City Administrator Henry Veleker explained.
The reduction in total value is effective Jan. 1, 2011, thus eliminating the penalty of about $8,000.
Ald. Paul Mayou, who is the chairman of the city's Finance Committee, said in the past, the city has been asked to reduce development targets on agreements because of economic conditions.
"This is a different situation," he said. "Something concrete had happened, which affected the amount."
When the Common Council met on March 20, it voted 10-0 to reduce Batra Hospitality's development agreement value by $339,300.
Jay Batra, of Batra Hospitality Group, purchased the Best Western Grand Seasons Hotel last May and requested the amendment.
The facility is tied to two development agreements that were entered into by the city with the previous owners.
Under those two development agreements, the previous owners agreed to a combined increase in assessed value of $1 million.
In exchange for that development commitment, the city provided a total development subsidy of $147,500 for the two agreements.
One agreement was entered into in July 2002, while the other was in September of 2003.
Since those agreements began, the city has collected $429,300 above the city subsidy of $147,500.
That total income above the city subsidy includes both new increment taxes and paid penalties.
In each of the last five years, the project was under the development target by about $300,000. The annual penalty amount was about $8,000. All of the penalties were made current when Batra purchased the property.
Batra requested an amendment to the development agreement to account for the loss of assessed value from the sale of 1.56 acres in December of 2005 to the owner/developer of the strip mall that is in front of the hotel.
The previous owners sold that property in December of 2005 for $470,000. Currently, the 1.56 acres are assessed at $396,600.
The Common Council is recognizing a reduction of $339,300, because there is an increased value in personal property that needs to be taken into account, City Administrator Henry Veleker explained.
The reduction in total value is effective Jan. 1, 2011, thus eliminating the penalty of about $8,000.
Ald. Paul Mayou, who is the chairman of the city's Finance Committee, said in the past, the city has been asked to reduce development targets on agreements because of economic conditions.
"This is a different situation," he said. "Something concrete had happened, which affected the amount."
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