City council approves redevelopment agreement for Broadway Hotel TIF project

UPDATE: The Columbia City Council approved a redevelopment agreement that would allow for tax increment financing to help fund construction of a second Broadway Hotel building.

The council modified two provisions in the agreement at their meeting Monday. First, the council took out the provision that capped the interest rate. Mayor Brian Treece wanted to cap the interest rate at 10 percent, but the council voted in favor of a flexible rate.

Mayor Treece also took out the provision that said the hotel would have to maintain 37 jobs each year. The hotel developer will still be responsible for creating 37 jobs, but the jobs will not have to rollover each year.

Six city council members voted in favor of the redevelopment agree. Mayor Treece voted against it.

ORIGINAL: The Columbia City Council will consider a redevelopment agreement between the city and the Broadway Hotel which would allow for tax increment financing to help fund construction of a second building.

The developer, David Parmley, asked the city to cover $2 million of the $20 million project.

The city made similar agreements for The Tiger Hotel and first Broadway Hotel tax increment financing projects, but this agreement has new two stipulations.

Unlike the other two, the agreement would cap the interest rate at 10 percent and require Parmley to certify that the new tower would create 37 permanent jobs.

Mayor Brian Treece said he supports the two new provisions.

He said that with interest rates at an all time low, having a cap would be low risk and make sure that the city’s $2 million promise wouldn’t get doubled in interest when Parmley reimburses himself or his lender.

“Taxpayers are not an ATM machine,” said Treece. “We can’t say we need $2 million for this project, and then spend $4 million in taxpayer money with half of it going back to the developer.”

But Ward 2 councilman Michael Trapp thinks having a cap would be a big risk, and thinks the success of the first two projects bodes well for the third.

“They were both able to get financing for their projects, they completed their projects, and they both added a lot of value downtown,” said Trapp. “I’m not sure what the argument is behind the fixed rate because it looks like it increases our own risk. We could be upside down depending on which way interest rates go.”

Treece said the job clawback will also make sure the 37 jobs Parmely promised would be created become permanent.

“Taxpayers are on the hook for 23 years so i want to make sure 37 jobs run though the life of that agreement like any other economic development project,” he said.

To find out more about the project, and how tax increment financing works, you can click here.