City officials plan to ask Grand Wayne Center to contribute $2.5 million over 10 years to help subsidize the almost $50 million hotel that is a part of the larger Harrison Square project.
Keep in mind that the city is already building them a parking garage as well as giving them the property they disgracefully took from Belmont Beverage through the use of eminent domain. But that's not enough.
The thing I don't get is that THEY WERE THE SOLE BIDDER; if they didn't have the money to build the hotel then why didn't they just subtract $2.5 million from the bid? I know, I know, they thought certain money from the state would become available and it didn't - but guess what? That's called RISK and the city shouldn't be on the hook for the hotel developer's poor decisions.
There was another part of the article that caught my eye:
In the initial non-binding contract with the hotel developers, the city agreed to work with Grand Wayne’s board of directors to allow the new hotel to recoup some of the room tax charged to hotel guests. Leatherman said the hotel developers will no longer get a direct rebate of the room tax, but the city hopes to use the $2.5 million as additional incentives for the hotel.
I think the reason they can't get a direct rebate of the room tax is because IT'S AGAINST THE LAW. The following piece of legislation states the tax must be paid to the state.
IC 6-9-9-2 (c) The county fiscal body may adopt an ordinance to require that the tax be reported on forms approved by the county treasurer and that the tax shall be paid monthly to the county treasurer. If such an ordinance is adopted, the tax shall be paid to the county treasurer not more than twenty (20) days after the end of the month the tax is collected. If such an ordinance is not adopted, the tax shall be imposed, paid, and collected in exactly the same manner as the state gross retail tax is imposed, paid, and collected under IC 6-2.5.
IC 6-9-9-3 indicates that this money comes back from the state to the county's capital improvement board and can be used to promote tourism. Hopefully our resident member of the redevelopment commission, Karen Goldner, can help us understand how exactly the Redevelopment Commission fits into this. And, if Karen is so inclined, I think readers would be very interested to hear her opinion on the subsidy in general...