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The Tiger Hotel owners request tax-increment financing

Friday, February 20, 2009 | 2:54 p.m. CST
The owners of The Tiger Hotel on Eighth Street hopes to receive tax relief so they can begin construction to renovate the hotel's rooms. The hotel previously operated as senior living center. With the renovations, owners hope to reopen once more as a hotel.

COLUMBIA — By June 2010, three Columbia developers would like The Tiger Hotel to be known for more than just the glowing neon sign perched 10 stories above Eighth Street. They want The Tiger to become a downtown destination. But they say it won't happen without a $1.7 million tax break.

The Tiger's owners — John Ott, Dave Baugher and Al Germond — propose a $4.4 million renovation of the mostly vacant building that would convert it into a 62- to 69-room boutique hotel. The project, they argue, deserves public investment because it will act as a downtown focal point, bringing more people to The District and boosting business there.

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"If you drive around downtown, most businesses are hanging on by their fingernails," said Craig Van Matre, the legal adviser for the project. Having a draw like a newly renovated historic hotel, he said, would bring more cash and jobs downtown.

Ott, Baugher and Germond say they need the help. Last week, they submitted an application for tax-increment financing, the first to be filed since the city declared its interest in the incentive as a way of encouraging redevelopment in the District.

Tax-increment financing, also known as TIF, is a new tool in Columbia that the city hopes to use as an incentive to help kick-start projects intended to benefit the community.

Here's how it works: When developers fix up buildings, their property values — and the resulting tax bills — normally go up. But with tax-increment financing, the extra taxes those owners would pay are pumped back into the development project, sometimes to pay for streets, parking, utilities or other infrastructure needs. The Tiger Hotel owners want to bring $1.7 million worth of additional property taxes back into their project.

To qualify for the incentive, a property must be in areas considered blighted or in need of conservation. The owners have to prove not only that their project will be of significant benefit to the community but also that they can't do it without public help.

The Tiger owners say the renovation fits the conservation criteria and will be good for all of downtown.

"If you have a draw like a fancy hotel, you're going to be bringing people downtown," said Van Matre, who wrote the TIF application. "Anything that encourages more people downtown will create a huge change."

The application suggests that in the long run, The Tiger renovation will bring in more property and sales taxes and create jobs throughout the District.

"It's like that old adage, 'a rising tide lifts all boats,'" Van Matre said. The class of people The Tiger will attract, he argued, might help the District make strides in other areas, such as crime prevention.

"There's no question that the people who are going to stay in that hotel aren't the kind of people who are likely to commit crime," he said.

Development Dynamics looked over The Tiger for the owners. Its report says that the building lacks modern basic utilities and that its foundation, floors, wiring and walls are deteriorating. Photographs in the report show exposed wiring and utility pipes and water damage to a ceiling in one of its rooms.

Ott said the rooms have been "mothballed" since they shut down a senior-living business in January 2007, and that they would need significant work that's too expensive for developers to do on their own.

"The exterior of the structure ... has undergone renovation work and is in sound condition," the analysis stated. "On the interior, nine of the ten floors will require extensive renovation in order to accommodate the needs of a modern hotel, from life safety improvements to complete demolition of existing partitions and fixtures."

The Tiger got a $4.5 million facelift before it opened for senior-assisted living. But "due to several factors, the project was unsuccessful in sustaining long-term use of The Tiger Hotel," the application's cover letter stated.

Ott said a lack of kitchens in rooms helped doom that effort.

"The senior population likes to have kitchen facilities," he said. "They are very independent, and our building didn't provide for that."

The developers expect future success with a boutique hotel. Ott said he sees The Tiger as a "destination" that would attract tourists interested solely in staying at the 1920s-era building. Each of the guest rooms would be highly stylized to fit the historical architecture.

It's too early to know exactly what each room would look like, Ott said, but he wants The Tiger to have character.

In the TIF application, the owners estimate the cost of the overall project — including the work already done — will hit $9 million. The developers have invested $4.5 million already and would need "every penny" of another $4.4 million to finish, Van Matre said. About 40 percent of the additional $4.4 million would come from TIF, while the rest would come from the owners, other investors and bank loans.

The Tax Increment Financing Commission will review The Tiger Hotel application and recommend whether the Columbia City Council should approve or deny it. The council will hold a public hearing before it votes.

The TIF Commission includes six mayoral appointees and representatives of Boone County, Columbia Public Schools and the Special Business District.


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Comments

Ayn Rand February 20, 2009 | 4:53 p.m.

It's not the public's fault that you wasted the proceeds from the Cumulus sale. Go find the money in the private sector. If there's a solid business case, investors will sign on.

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