Action by Fayetteville City Council on a private hotel tax deal late last month shouldn’t have taken place, says Councilman Kirk deViere. A request from developers of the Spring Hill Suites Hotel for final action on a request for a rare tax break was heard at council’s Nov. 28 meeting. “The proposal was supposed to go to a council committee for study, and suddenly it appeared on the agenda,” said deViere. Not only that; the proposal had never been considered by Cumberland County Commissioners.
“The county board referred the matter back to FCEDC for review,” recalled outgoing board chairman Marshall Faircloth. “Then Russ Rogerson left town to take another job and the issue never came back to the board,” he added.
Rogerson was the local industry hunter when the Spring Hill Suites request for tax breaks was broached last spring. He told the council that without the tax incentives, Springhill Suites would not get built. “He’s full of crap,” said Councilman Bill Crisp. In fact, construction work on the new hotel adjacent to the Embassy Suites had already begun when council decided to grant tax relief. The same company owns both properties on Lake Valley Drive off Yadkin Road.
“Even though the tax incentive policy is a joint city/county agreement, it doesn’t keep one entity from going it alone,” Faircloth added.
The owners of both local hotels have been granted forgiveness of one-half their property taxes for the first five years. In the case of Spring Hill Suites, it’s not a lot of money — about $87,000 or $17,400 a year. “The project was going to happen with or without the incentive,” said deViere. “Why give incentives to an industry that doesn’t need them? This incentive doesn’t produce jobs,” he added.
Only two other members of council agreed with him and the request passed 6-3. Crisp and council member Ted Mohn voted with deViere. Mayor Nat Robertson and council members Jim Arp, Mitch Colvin, Bobby Hurst, Kathy Jensen and Larry Wright were in the majority. Councilman Chalmers McDougald was absent. The company got an even bigger tax break when it came before city council six years ago proposing to build the Embassy Suites Hotel. Council was in agreement then that a first-class hotel was needed near Fort Bragg. Forces Command and Reserve Command headquarters had moved to Bragg.
The new Spring Hill Hotel will add 121 rooms to the local inventory of 6,100. But deViere points out it does not provide the large convention space officials say is needed here. Mayor Pro Tem Mitch Colvin noted that a local group of 400 people took their convention to Raleigh because of a lack of space in Fayetteville.
Fayetteville Convention and Visitors Bureau Executive-Director John Meroski declined to comment on the Spring Hill incentives arrangement but said “I am sure there is some heartburn from other developers and hoteliers. Between 2000 and now, we have grown from 49 hotels/motels, to 76,” he said.
That’s 1,500 additional rooms, with more on the way. A six-story hotel on Sycamore Dairy Road is under construction. “Occupancy tax collections have grown from $1.2 million to $5.6 million,” Meroski noted, “and tourism is up 54 percent in a decade.” The general rule of thumb, according to the convention and visitors’ bureau, is that hotels will make money with 60 percent occupancy. The current occupancy rate for the last 28 weeks is 73.6 percent, he stated.