Move could help fund proposed boutique hotel project
The Stillwater City Council will consider establishing a new downtown TIF district that could be used to partially fund a proposed boutique hotel project in the old Joseph Wolf Brewery buildings and other future projects.
The group Stillwater Caves LLC wants to create a 37-room boutique hotel and 4,000 square feet of retail space in the Wolf buildings. They would seek $1.15 million in TIF assistance from the city for the project.
The original proposal presented by city staff Tuesday was approving a conceptual TIF district and getting more details from the developer on the project later. That idea was presented to the council at a July workshop.
“The authorization to establish a TIF district falls into the various economic development of buildings in the area. This particular project meets many of our objectives of the TIF policy; lower tax base, substandard building and the possibility to preserve our historically significant structures. I think there’s many good reasons to move forward with this,” said Community Development Director Bill Turnblad.
He added that specific needs must still be met to move the project forward including a consultant to look at the market for rooms and occupancy rates, conventional financing before the project is approved and a letter of recommendation from a private financing/banking person. He also said a risk assessment of the project would have to be done.
“If we agree to a conceptual approval of the plan, I feel like we’d be charging ahead when all we’ve seen is a cute picture to look at,” said Mayor Ken Harycki. “We need the pro forma and we need to continue to discuss looking into the project, if we decide to do this now I’d feel like we are going too fast with too little detail.”
“We have a preliminary pro forma but if we had to choose between the two options it would be more important to establish the TIF district, which would give us the ability to move forward, gather more detail, and create TIF district number 11,” Turnblad said.
City Attorney David Magnuson said the last new TIF district was established in 2005.
Council members were wary of approving city money for the concept outright without the pieces listed above and decided to split the proposal and begin looking into establishing a new TIF district.
“What this decision does is tells the group tonight that it is not yes and it’s not no, but simply that we need more information, which is something that we did earlier,” Harycki said before the unanimous council vote to look into establishing the new TIF district.
Setting up a new TIF district takes at least 30 days and would cost at least $7,500, according to Magnuson. The development group has paid a $5,000 application fee to the city which would cover most of the cost to establish the new TIF district. City Administrator Larry Hansen said the application fee requirement was created awhile ago.
“This was established years ago to make sure that companies wouldn’t go on fishing expeditions to see how much money they could get and would cover most of our costs for the project,” he said. “I certainly understand your reluctance, and until I get more data I’m not gonna give my personal recommendation. This new district could also help us with future projects, as well.”
Magnuson said the city would need comments from Washington County and Independent School District 834 officials as part of setting up the new TIF district.
The size of the TIF district and what would be included in the district are among details left to be decided, since plans are in the beginning stages, But Hansen said the proposed district would not be large.
Hansen acknowledged that the Wolf buildings need restoration and added that a reasonable-sized district would allow for money to be used on future projects in and around the area if the current proposal does not work out.
The council opted to continue looking into TIF district options, with decisions on the new district expected to be presented at an October council meeting.
Contact Avery Cropp at [email protected]