Abilene City Council approves agreement for downtown hotel

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ABILENE, Texas (KTAB/KRBC) – Abilene City Council has voted to approve a Master Development Agreement for a new downtown hotel.

After a recap of the financial logistics of the proposed project, an overview of the potential hotel design, and hearing comments from the public, councilmembers voted unanimously to approve the agreement.

That new hotel would be a DoubleTree by Hilton, pending franchise agreements, the City said on Monday morning.

The City of Abilene’s financial commitment to the project is $23.1 million,according to the City. The $23.1 million would come from about $7.5 million in grants from local foundations, about $4 million in cash on hand and $11.6 million in proceeds from a $12.4 million debt issuance by the City.

The City’s cash on hand comes from the Minor Improvement Fund and the Tax Increment Reinvestment Zone.

According to the City, certificates of obligations issued to directly finance the public convention center part of the project will be required to generate the $11.6 million needed. The debt issuance will be on a 25-year term.

“The project consists of the City Facilities which include public conference rooms and meeting space of approximately 38,700 sq. ft., including a ballroom of approximately 12,000 square feet, ancillary facilities and infrastructure in support of the conference rooms and meeting spaces, and a surface parking facility with at least 200 parking spaces,” said the City’s memo. “In addition to the City Facilities, the project consists of the Hotel. The Hotel will be a full-service Hotel, with a minimum of 206 rooms and will include appropriate support facilities and amenities consistent with a full-service hotel.”

The City said it will repay the contribution from the state and local HOT tax, generated from the downtown hotel itself. Using the State’s portion was approved by the State Legislature with HB 2445. The City said projections show enough tax revenue from the project to cover the City’s $12.4 million Certificate of Obligation Issuance.

A memo from City Manager Robert Hanna states that it will not spend any money on the hotel until the hotel franchise is secured and the State Comptroller’s Office declares the City’s eligibility to use its portion of the Hotel Occupancy Tax (HOT) as outlined in HB 2445.

The City said it is anticipated the franchise agreement will be complete and the Comptroller’s Office will declare the City eligible within the next 6 months.

After debt issuance and the finishing of the project development phase, the City said the hotel would be open for guests in late 2021 or early 2022.

The Master Development Agreement is a formal terms of agreement for the development of the hotel.

“It is the foundation document from which all of the other development related documents will be approved at a later date,” read the memo from Hanna.

The Master Development Agreement is with Garfield Public-Private, who was awarded the project in 2016 when the City of Abilene and the Abilene Industrial Foundation submitted a Request for Proposals in 2016. Garfield Public-Private and the City of Abilene entered into a Pre-Development Agreement in June 2017.

“That means we get the drawings, the specs. This is really the development phase on that,” said Abilene Assistant City Manager Mindy Patterson. “Then phase 2 is the actual construction phase. What council is doing in this meeting is entering into the agreement with Garfield Public/Private.”

A third phase is post construction, where the Hotel Operator will then take over the operations of the hotel.

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