Galion City Council is expected to consider a tax increment financing (TIF) district next week that would lead the way to a hotel in the city sometime next year.
Officials say the $5.5 million Sleep Inn & MainStay Suites hotel project would consist of a 70-bed room hotel at three acres of now-vacant property on Brandt Road near state Route 598, offering both nightly and extended stay. The upper mid-scale Sleep Inn & MainStay suites hotel brand is part of the Choice Hotels International chain, based in Rockville, Md., and is a new dual and prototype brand that the company launched a couple years ago. There are currently more than 30 under construction in the nation.
“It’s a great hotel for Crawford County,” said Steve Kleinknecht, regional director of hotel development.
Kleinknecht said rates for the room would range from $79 to $139 a night. No information is currently available on what amenities will be offered.
Now living in Powell, the 1980 Galion High School graduate said the hotel would be a great opportunity for the city.
“A hotel helps stimulate growth (in the local economy),” he said.
He referred to a feasibility study, completed earlier this year, supporting the city’s need for a hotel, which would provide lodging for people visiting the area for reunions, corporate events and other occasions. A hotel would also attract new business, Kleinknecht says, because companies would also need a place to stay overnight for business-related trips.
Mayor Tom O’Leary and Gary Frankhouse, executive director of the Crawford County Partnership for Education and Economic Development, approached Kleinknecht about bringing the hotel to the area.
After the feasibility study was completed, Kleinknecht brought in several developers to meet with O’Leary and Frankhouse. An Ohio-based company was selected as the developer and will also operate the hotel. Kleinknecht did not release the name of the developer.
“These guys see the value (and) the like the area,” he said. “(They) are one of the most creative builders in the Midwest.”
The Galion-Crestline Area Chamber of Commerce also provided information for developers.
“I think it may be the start of getting more development out there,” said Steve’s father, Joe, president and chief executive officer of the chamber. “He’s very excited to do something for his hometown.”
The project would take about five to seven months to complete. Depending on when construction begins, developers are looking to have the hotel open by the summer of 2016 at the earliest.
The city’s finance committee was slated to meet Tuesday night on working to create a TIF, which is a subsidy for redevelopment, infrastructure and other community-improvement projects, used along with similar or related value capture strategies around the world. If the idea is approved by the committee, it will placed on the agenda at next week’s City Council meeting.
“At the Finance meeting we are going to request them to vote out of committee the resolution of support,” Mayor Tom O’Leary said. “For the creation of the tax increment finance (TIF) area.”
O’Leary said the TIF legislation that describes where the road is going and where the infrastructure will be. The city will not know until they see a site plan. After the city finishes finalizing any incentives for the project, the next step would be applying for permits and sighting the land where the hotel will be located.
“The developer will lease about three acres of a approximately 15 parcels on Brandt Road,” O’Leary said.
In order for the infrastructure to be put in, the city must have a portion of the land given to them.
“We will have to know what part of site the owner will dedicate to the city,” O’Leary said. “So we can have it as public right away.”
The hope of the Mayor is that the finance committee will vote out the idea of a non-binding resolution.
He said in the sense it’s not the actual TIF ordinance, but it will commit the city to use tax increment financing to fund the necessary infrastructure.
“The financing that is put in place,” O’Leary said. “Money will be borrowed to create the infrastructure that we really only have an estimate of the cost. Another reason we want to wait to create the TIF.”
O’Leary said the taxes that come off the new investment, a portion of those will be directed to pay off the infrastructure debt that will be incurred. A portion will go to the schools and anybody else who pays property tax.
“Under the Ohio law,” O’Leary said. “There are two conditions. One if there is not a million dollars in payroll. Two that you don’t need more than 50 percent of the new taxes to pay off the TIF then you can do it without any negotiation with the school board. It’s largely their taxes that will be directed.”
O’Leary said this will be a good opportunity for the city to have bring businesses to the area.
“This will be public infrastructure,” O’Leary said. “We’ll have an extension of public water, roadway and sewer for other business to potentially tie into.”
He said the community will have a more developed platform on 598, Brandt Road and U.S. 30 if this goes through.
City Councilman Dr. Thomas Fellner said he thinks the hotel is a good idea but does have its risk.
“I do hope it’s a situation (of) if you build it, they will come,” he said. “I believe we have to take some chances on new ideas.”
