COLUMBIA — If you stand in the center of the eighth floor of The Tiger Hotel, you can see downtown Columbia in every direction. But more than two years after the city approved a tax increment financing measure to help finance the hotel's redevelopment, you still can't check out a room.
By the end of February, owner Glyn Laverick hopes that's no longer the case.
Surrounded by concrete, piping, metal beams and temporary hanging lights as he spoke, Laverick said the demolition phase of the eight floors where rooms will be built is almost complete.
Rooms on the top two floors should be available to rent by the March 1 opening of the True/False Film Festival, he said. "We've been working pretty diligently on the inside."
The other six floors of rooms will open in phases, Laverick said. He is aiming for all of them to be available within a year.
The hotel will have 62 rooms and "a contemporary design in keeping with the historic feel of the building," he said. Of the 62 rooms, 59 will have views, and the other three will have private gardens.
The renovation of the hotel began shortly after Laverick's company, Columbia Hotel Investments Inc., bought the property from Tiger Columns LLC in March. According to a document filed at the Boone County Recorder of Deeds office, Tiger Columns loaned Laverick $4.34 million to help finance the purchase of the hotel.
John Ott, a partner at Tiger Columns, said he hasn't been involved in the project since selling the property, but he occasionally meets with Laverick and tours the hotel.
Ott didn't say exactly why Tiger Columns decided to sell the hotel. He did say that he he and his partners knew they'd need to find a hotel development company and that the company might want to own the property.
"As time went on, it became clear it was the best way to do it," he said.
In July 2009, the city approved tax increment financing for Tiger Columns to redevelop the property.
Through tax increment financing, the hotel's property taxes will be frozen once the hotel opens and is reappraised. The tax revenue generated by the increase in property values after the hotel is reappraised — as well as half of the hotel's sales taxes — will go to Columbia Hotel Investments for renovation costs.
Laverick's company will be eligible to receive these tax reimbursements for 23 years, or as long as it takes to accrue $1.79 million. After that, normal tax rates will apply.
Before selling the property to Laverick, Tiger Columns struggled to complete financing for the renovation, causing the city to extend its financing deadline twice, most recently in March. To be eligible for property tax reimbursements, Columbia Hotel Investments has 18 months from the time renovation began (in March) to complete the entire project.
Assistant City Manager Tony St. Romaine said the financing doesn't expose the city to any risk; if anything goes wrong with the hotel, it would still collect the same taxes it does now.
Most of the reimbursements will come from property taxes, St. Romaine said, but the tax revenue won't start accruing until the hotel is reappraised after it opens.
Sales tax revenue has been accumulating through businesses inside the hotel since the Columbia City Council approved the tax incentives. The amount accrued so far is "probably pretty insignificant," St. Romaine said, and the city has not received any requests for reimbursements.
The original deadline to complete financing for the renovation was June 30, 2010, and construction was to start within 90 days of that date. As deadlines were pushed back and the project dragged on, the city had some doubts, St. Romaine said.
"I think there were times when we wondered if this project would ever take wings and fly," he said.
The current redevelopment is one of many attempts to renovate the hotel, which first opened in 1928. It was closed by order of a federal bankruptcy court in 1987 and reopened as a senior living facility in 1990. Tiger Columns bought the hotel in 2003.
In addition to tax increment financing, Laverick said the hotel received preliminary approval for state and federal historic tax credits. He didn't give a dollar estimate as to how much the hotel would receive from the credits.
"It will depend on what they deem to be eligible expenses," he said. "We wouldn't find out till later down the road."
The federal historic tax credit is equal to 20 percent of approved costs, and the state credit is equal to 25 percent of approved costs.
When the project was approved for tax increment financing in 2009, the estimated price tag was $8.9 million. Laverick said the final total might slightly surpass that figure.
Since purchasing the property, Laverick has made a few additions to build the hotel's appeal. V2, a nightclub on the ground floor, opened last month.
Next week, The Velvet Cupcake, a specialty cupcake shop, plans to open on the ground floor in the space previously occupied by Bleu Market.
Laverick said the hotel also will create a valet lane out front and will rebuild the sidewalk to bow out into the street by the corner of Eighth and Cherry streets.
He said the hotel is already booking rooms for next year, and he is confident it will become an immediate destination. "It's going to set the standard for hotels," he said.
"It'll give people the quality and luxury of big-city hotels, but it's here in downtown Columbia," Laverick said.