Jul. 23--\The City of Huntsville's Tax Increment Reinvestment Zone directors have placed two proposed hotel projects on hold.

The seven-member board voted unanimously Monday afternoon to table any action on Hampton Inn and Marriott Hotel projects seeking TIRZ assistance because of a legal issue.

Glenn Isbell, special projects director for Huntsville, was scheduled to outline proposals for the two hotels, ranging from number of rooms to other amenities.

Hotel developers are seeking financial assistance with construction of public infrastructure.

TIRZ chair Todd Armstrong and directors Dalene Zender, Sam Dominey, Richard Montgomery, Danny Pierce, Robert Autery and David Moorman voted to table the proposals until issues can be resolved and the proposals returned to the TIRZ agenda.

TIRZ directors can recommend that the proposals go before the City Council for final approval and make the projects become reality.

It is left up to the nine members of the City Council to decide if they want to improve the community and help it grow by generating more tax revenue for the city and schools or work as more of a deterrent to progress.

Armstrong said the two hotels have a combined value of $11 million.

The expected locations for the projects are tracts near Smither Road off Interstate 45.

Prior to the start of Monday's TIRZ meeting, a City Council member -- who also serves as a TIRZ director -- brought it to the attention of Armstrong and city attorney Thomas Leeper that another councilmember -- Mac Woodward -- has a fractional interest in the property where developers are wanting to build the hotels.

Leeper said the property is owned by the Robinson family.

Woodward said Tuesday he has no comment regarding the situation.

According to a provision in the state tax code, TIRZ directors and councilmembers cannot have any interest in property being considered for financial assistance to construct public infrastructure or is eligible for tax abatement.

The TIRZ meeting lasted 15 minutes when the legal issue with the property was brought before TIRZ directors.

Armstrong opened the meeting by explaining the situation and then sought Leeper's legal opinion.

"There is not a clear-cut answer at this stage," Leeper said. "It would be subject to some scrutiny. You don't want to be the one who makes a new law. This could be an area where you are making a new law. This is an area where I would urge caution."

Leeper advised Armstrong that "a plain motion to table indefinitely works."

The hotel proposals could be brought back to TIRZ directors when ownership of the land changes, Leeper said.

Isbell advised explaining the situation to the two developers and see what they want to do.

Armstrong made a motion to table the proposals, which passed by a 7-0 vote.

Leeper said the developers could complete the land transaction with the current owners before approaching TIRZ directors a second time for financial assistance to develop the property.

"Based on advice from the city attorney, ownership of the property would have to change hands before we could have the proposal come back before the TIRZ board to be evaluated," Armstrong said.

Armstrong said the TIRZ process is a standard tool used by developers throughout Texas.

"The developer makes a deal with the city to build public infrastruture such as streets, water and sewer," he said. "Then they continue to build their private development and once that is complete, we begin to reimburse the developer for the public infrastructure over a 10- or 12-year period.

"It's a good deal for the city -- it's out no risk at all."

In the event that a developer fails to complete its private development, Armstrong said reimbursement would not be given.

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