Willits solution brings mixed reviews from Basalt candidates
March 28, 2014
The Basalt Town Council's solution to a stalemate with the developers of Willits Town Center over a hotel and affordable housing brought a mix of reactions from candidates in Tuesday's election.
The council decided on March 25 to send a question to the November ballot that will ask Basalt voters to approve an additional 2 percent lodging tax. If it is approved, the proposed hotel at Willits would be able to use the revenues its hotel generates through the tax for 10 years to help defray the cost of construction.
Other hotels would be given the same option.
If the 2 percent lodging tax doesn't pass, the council agreed to give a $500,000 lump-sum payment from the town's general fund to the developer to help subsidize the cost of construction.
In return for the subsidy, Willits owner Mariner Real Estate Management agreed to start work on a 50-unit affordable-housing project by the time the hotel is completed — anticipated to be by the summer of 2015. If work hasn't started on the affordable-housing project, Mariner won't be eligible for the 2 percent lodging tax or a $500,000 lump-sum subsidy.
Different views on $500,000 subsidy
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Councilman Mark Kittle, who is running for re-election, was part of a 6-0 vote in favor of the settlement.
"It's an awesome idea," he said Thursday. "I think the voters will pass the tax in November because it doesn't come from their pockets."
Kittle said he would have liked stronger wording that would have required a substantial amount of work done on the affordable-housing project — such as the foundation being poured — by the time the hotel is completed. However, he said he was concerned that Mariner officials would have walked away from the project if the town required more conditions. Kittle said at a candidates forum that getting lodging constructed was his "only agenda."
Candidate Bernie Grauer spoke during the public hearing at the council meeting and said he supports asking voters to approve a 2 percent lodging tax, but he's opposed to the $500,000 subsidy from the town's general fund if the lodging tax fails. Providing the general fund subsidy opens a "Pandora's Box," Grauer said. The town only has a $2.5 million cash reserve, so providing $500,000 to one development is "a big hit," he said.
In addition, he said, any available dollars from the general funds should be used for revitalization efforts in the downtown core, which faces tougher economic times than Willits.
Grauer, chairman of the Basalt Planning and Zoning Commission, said the board approved 31 of 34 proposed amendments to the Willits Town Center land-use approval to accommodate the hotel. However, the planning commission rejected the idea of a cash subsidy, he said.
Problem with late notice
Candidate Richard Duddy said he has a problem with how the process played out on the issue. A lodging tax shouldn't have emerged as an option in the 11th hour, without residents being aware of it, according to Duddy.
"I would have been uncomfortable with that coming up at the last minute," Duddy said. He added that he was somewhat reluctant to comment on a process that he wasn't part of.
"I'm not saying it's not a good deal for Basalt. I'm saying it's too late," Duddy said. "It's a complicated deal to be voting on without vetting."
If Mariner weren't able to build a hotel without a subsidy, that should have been clear from the start of the application, which has been under review for several months, Duddy said. He said he isn't personally against providing incentives, but that it should have been on the table earlier for proper discussion.
Duddy said he also is sensing from voters that they are not comfortable with tax breaks in any form for Willits Town Center. The sentiment seems to be that incentives should be reserved for use in downtown, he said.
In contrast to Duddy, candidate Jeff Orsulak said placing the 2 percent lodging tax on the ballot and committing to the $500,000 subsidy in case the vote fails were appropriate steps to advance the project.
"A hotel is something we really need," he said.
The solution was a compromise that satisfied the major sticking points of both parties, he noted. "It was a point where both sides got comfortable. If both sides aren't comfortable, you're not going to have a hotel," Orsulak said.
The revenue from an additional lodging tax is a tool that other tourist accommodations downtown can use for improvements, Orsulak noted. If the lodging tax fails, he believes it is appropriate for the community to invest the $500,000 in the hotel because the economic boost it will provide will be substantially greater through spending and sales taxes.
Orsulak said he would support using a subsidy from the general fund, if necessary, to assist other hotels making improvements, such as the Green Drake, the Aspenalt and a possible new hotel downtown. The size of the subsidy would be dependent on the cost of the project, he said.
The funds wouldn't deplete the town's coffers, he said, because added sales tax revenues from the Willits hotel alone will more than offset the amount of subsidy.
Residents' views needed
Candidate Gary Tennenbaum is on vacation for spring break with his family this week. He was reached by email and told about the council's complex solution to the Willits conundrum. When asked how he would have handled the issue as a councilman, Tennenbaum responded, "From my take I would not want to commit any general funds to a development project without serious time to digest the impacts and if that subsidy is really needed. But asking the voters for a lodging tax is interesting. I like that it could help all existing and future hotels but I do believe the town needs to hold a financial guarantee for the completion of the affordable housing.
"I need to look into this further before making any assumptions," Tennenbaum wrote. "To gather more input on this I would not have quickly approved this and let more time for residents to weigh in."
The five candidates are running at-large for three council seats. The winners will serve four-year terms.