Hayden developers want to take advantage of the town’s economic incentives program to secure the financing to build a 46-room proposed Best Western-branded hotel on the west side of town.

Hayden developers want to take advantage of the town’s economic incentives program to secure the financing to build a 46-room proposed Best Western-branded hotel on the west side of town.

Tax incentives sought to make Hayden hotel a reality

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Hayden Town Council meeting

  • Thursday, May 2, 2013, 7 p.m.
  • Hayden Town Hall, Hayden, CO
  • All ages / Free

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— Developers in Hayden are hoping to tap into an economic incentive program to make a hotel in Hayden a reality.

The Hayden Town Council on Thursday will hear the proposal from the developers, brothers Louis and Stefanus Nijsten.

The Town Council will meet from 7 to 7:30 p.m. at Hayden Town Hall for reports from staff members. The regular meeting starts at 7:30 p.m.

The developers have been working on building a hotel in Hayden since 2009.

“Obviously, we’re very excited about our project because it’s starting to come together,” Stefanus Nijsten said.

A 2010 study commissioned using a $10,000 U.S. Depart­ment of Agriculture rural development grant showed the idea was viable. Nearby industries like the Twentymile Mine, Yampa Valley Regional Airport and the Hayden Station power plant help fuel the need for lodging, but the developers have been unable to secure the financing needed to build the hotel.

“Even though the feasibility study suggests that this should be a moderately successful investment, and a good idea on a good location, we have found both banks and investors hesitant in taking on real estate and operational risk in the town of Hayden,” Nijsten wrote. “An incentive package will signal that this community is squarely behind the idea of bringing a quality hotel to town, and it will also reduce financial risk to the owner, and thus making this investment opportunity attractive enough to make a financial commitment.”

The developers are proposing that a percentage of sales, lodging and property taxes generated by the new hotel would be rebated back to the hotel owners to help offset the financial risks.

“The key to this application is to ask the town to forgo short-term income from a business that does not exist today in exchange for long-term revenues from that same business,” Nijsten wrote.

For the first five years of operation, the developers are asking for a percentage of property taxes that otherwise would go to the town.

For at least seven years, the developers are asking that a percentage of sales and lodging taxes collected by the hotel be rebated. The rebate would be from zero to 95 percent depending on occupancy rates at the hotel.

"These terms have been chosen to create the best chance for success for the business and subsequently the town of Hayden," Nijsten wrote.

Even with the rebates, the developers think that by the third year the hotel will directly and indirectly generate more than $60,000 in taxes for the town.

“What we found important is to create a project that creates a net plus for the town of Hayden and us,” Nijsten said.

The proposed 46-room Best Western-branded hotel would be on the west end of Hayden in the Creek View Subdivision at Fifth Street and U.S. Highway 40. The developers said it would employ 10 full-time employees who would earn an average annual wage of $25,533.

Nijsten said they hope to begin building the $3 million project this summer.

On April 22, the Hayden Economic Dev­­elopment Council unanimously approved the proposed incentive project. Nijsten was hopeful the Town Council would show similar support.

“I hope they find the arguments presented in this package are convincing,” Nijsten said.

To reach Matt Stensland, call 970-871-4247 or email mstensland@SteamboatToday.com

Comments

John St Pierre 1 year, 7 months ago

I guess the last few years have had no affect on the rational of some people.... if I read this right... "it will also reduce financial risk to the owner, and thus making this investment opportunity attractive enough to make a financial commitment.” The developers are proposing that a percentage of sales, lodging and property taxes generated by the new hotel would be rebated back to the hotel owners to help offset the financial risks."

So the owners have little skin in the game.. the taxpayers and City are on the hook.. where have we seen and heard this before???? remmeber the housing bubble???? If the city is so pro... why don;t they just do it themselves.... I would hope that at least the City would take a Lien position against the property and owners... what is to stop them from walking away... should say the project fail?????

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Scott Wedel 1 year, 7 months ago

The Town does not appear to have any plans to finance the hotel, but to just give it a tax break. Which presumably they give to anyone that invests significantly in town. :)

I don't see why the tax break would affect their ability to get financing. I'd expect a lender to be worried about a low occupancy level and if that were to occur then the tax breaks wouldn't be much benefit.

The big challenge is going to be that SB has so many rooms that it doesn't fill up and the pricing is pretty competitive. SB is not like Telluride which has very expensive lodging in town and so there are motels in nearby town doing well picking up the overflow and bargain hunters.

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Stuart Orzach 1 year, 7 months ago

Private profit, public risk. Do government bureaucrats ever learn?

Scott, Note the request for highly variable rebates on sales and lodging tax that help push risk onto the town..

If the project doesn't meet developers' projections, who pays? Who benefits? Is it worth it for 10 mostly lousy jobs? What demands will this place on infrastructure? Who pays for that?

Bankers aren't stupid. There's a reason they won't finance the project.

Government should stay out of the development game and focus on keeping its own house in order. They've never been very good at either.

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Rob Douglas 1 year, 7 months ago

In my opinion, Stuart is absolutely correct. And, that's twice in the last week or so that I've agreed with Stuart. I suspect he'd be as surprised as I am. ;-)

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