San Luis council OKs development pact for new hotel
SAN LUIS, Ariz. — The developer of a commercial complex here that will include a hotel will get a 50 percent tax break, under an agreement San Luis officials say will provide economic benefits far exceeding what the city will give up in incentives.
The San Luis City Council on Wednesday approved the agreement with developer San Luis Commercial Holdings, under which the city will reduce from 4 to 2 percent the sales tax rate levied on three businesses over a 15-year period.
The reduction translates to a total estimated tax incentive of $1.82 million for the hotel, a restaurant, convenience store and other businesses located on a six-acre parcel on the northwest corner of County 22nd Street and Main Street.
An economic impact study done for the city by consultants to the city, the Willdan Group and Economists.Com, projects that in the same period the development would generate a nearly $3.6 million shot in the arm to the economy, in the form of jobs, sales tax revenue collected at the reduced rate and other benefits.
The council approved the deal on a unanimous vote following a presentation Wednesday about the project’s anticipated economic benefits.
“This is a very good project, with minimum risk for the city,” Mayor
Gerardo Sanchez said. “It is being estimated that over 15 years (the sales taxes collected at the halved rate) could reach about $6 million. That’s more than the incentive we are giving them.”
The agreement, the result of nearly three years of talks between the city and San Luis Commercial Holdings, allows the developer to arrange financing and begin work on the $15 million project.
The unnamed hotel is expected to have 80 to 90 rooms, but few other details were disclosed about it or the neighboring restaurant, convenience store and another undetermined business.
Sanchez said the development will help meet the city’s need for overnight
accommodations and more dining options.
“We have more than 35,000 residents (in San Luis), but there are nearly 8 million people who cross the border here every year. We are well-justified in having a good hotel,” he said. “But it’s not just about generating tax revenue,” he added. “We are talking about sources of jobs that San Luis needs.”
The project is expected to create at least 99 temporary jobs during constructions, and then about 45 permanent jobs.
Ross Wait, a representative of the developer, said financing and purchase of the site could be finalized in the latter part of this year.
“A hotel is very much needed in the community,” he said. “This is a tremendous opportunity for us.”