|By Ray Gronberg, The Herald-Sun, Durham,
N.C.McClatchy-Tribune Regional News
July 20, 2012--DURHAM -- City Council members have scheduled an Aug. 6 public hearing on whether to pledge $5.7 million in business incentives to Kentucky firm that wants to convert downtown's SunTrust tower into a hotel and art museum.
The decision came Thursday, after members reviewed the proposed deal with 21c Museum Hotels.
It appeared from their comments that members support the proposal, which would combine with a $2 million pledge from the county to support a $48.5 million renovation of the former bank building.
"I must say, this is a very impressive outfit," Councilman Eugene Brown said. "We're not talking about a Motel 6 here, folks. It's way beyond that."
The 21c brand is in fact a premium, boutique hotelier that began in Louisville, Ky., and is in the midst of expanding to Lexington, Ky., Bentonville, Ark., and Cincinnati, Ohio.
Its plan for the Durham project calls for charging about $195 a night when it opens, and then raising rates as the years go on, Office of Economic and Workforce Development Director Kevin Dick said.
Mayor Bill Bell said that while his final decision is subject to change pending the upcoming hearing, the project would support the "tremendous investment" the city and county have made in the Durham Convention Center by increasing the supply of hotel rooms downtown.
The mayor also noted that the incentive offer is a pledge of future tax revenue that wouldn't come in but for the hotel's presence. "We're not using existing money," Bell said. "You can't lose what you don't have."
But one councilman, Steve Schewel, cautioned that other entrepreneurs shouldn't see the council's willingness to offer incentives to 21c as a sign that it would continue entertaining such proposals indefinitely.
"I hope we're at the point where, other than for these key projects, which I consider this to be, that we won't have to offer these kinds of incentives," Schewel said. "I'm very hopeful that we can be weaning ourselves from this, especially downtown where there is so much demand."
Schewel noted that since he joined the council in December, "pretty much everybody that comes up here with a development wants an incentive, whether it be for a charter school in east Durham, a hotel downtown or apartments on the [Durham-Chapel Hill] boulevard."
His mention of the charter school project alluded to a $236,000 pledge the city made in early April to the renovation of the former Y.E. Smith School on Driver Street.
Schewel, a former Durham school board member, voted against that offer because the project will become the new home of the Maureen Joy Charter School.
As for the apartments on the boulevard, Schewel likely was alluding to the proposed University Marketplace, which could combine offices, retail space and apartments on a site across from the Sam's Club/Super Target complex in southwest Durham.
That project's Charlotte-based developers have made no secret of their desire to land incentives for the stalled project. The council went into closed session Thursday to discuss an economic development matter, and a briefing book carried by some officials who were staying for the session was titled "University Marketplace."
Dick in years past has pushed the council to say it'd be more open to subsidizing projects in the former South Square area, which saw its fortunes wane after the Streets of Southpoint mall opened in south Durham 10 years ago.
But some members, Councilwoman Diane Catotti most vocally, have resisted that idea on the grounds that the area could recover without city financial aid.
As for 21c, Dick's predecessor, former Assistant City Manager Alan DeLisle, said Thursday the firm's Louisville hotel has been a "major attraction" for that city's downtown.
Its operators "just exude creativity" and in that respect are a "very good fit" for Durham, said DeLisle, who left his Durham job in 2009 to take over as director of Louisville's Downtown Development Corp.
(c)2012 The Herald-Sun (Durham, N.C.)
Visit The Herald-Sun (Durham, N.C.) at www.heraldsun.com
Distributed by MCT Information Services