|By Jennifer Sorentrue, The Palm Beach
Post, Fla.McClatchy-Tribune Regional News
Jan. 14, 2013--The plan to build a hotel next to Palm Beach County's convention center in downtown West Palm Beach has cleared its final hurdle.
Assistant County Administrator Shannon LaRocque said Monday that all of the construction contracts have been signed by both the county and the developer. In a largely ceremonial move, the county commission is expected to formally accept the documents at a meeting Tuesday.
The Related Cos., the developer that commissioners selected in 2010 to build the long-awaited hotel, has given the county its required $5 million security deposit. Related has until May 2014 to begin construction on the 400-room Hilton hotel or it will forfeit the deposit, the county said.
LaRocque, who helped negotiate the deal with Related, said she expects work will begin before the 2014 deadline. She said she is scheduled to meet with Related and the construction team later this week.
Commissioners in October approved a $27 million public subsidy for the hotel's construction. At the time, the commission also gave Chairman Steven Abrams permission to sign off on all required contracts and agreements once the $5 million security deposit was received.
Under the deal, the county will retain ownership of both the hotel and the property it sits on and as a result, the project will be exempt from property taxes. Related will contribute $70.8 million to the hotel's construction. An additional $8 million is expected to come from federal tax credits.
In a separate but related deal, Related agreed to pay West Palm Beach $27.2 million over 33 years in lieu of property taxes, while the city would send about $13 million back to Related to help support the hotel.
County administrators have said the county's $27 million subsidy will increase its annual debt payment by about $2.2 million. Administrators estimate the project will create more than 1,500 construction and tourism jobs and contribute more than $1 billion to the county economy over 10 years.
Tourism leaders have urged commissioners to support the project, saying the convention center will never be able to compete with other tourist destinations unless it has an adjacent hotel.
Commissioner Paulette Burdick, whose district includes downtown West Palm Beach, called the hotel an "essential component."
"I think it supports our local business," Burdick said. "It supports the convention center to attract conventions. It is good for tourism."
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