Vidalia mayor doesn’t like hotel deal

Published 12:16 am Monday, November 7, 2016

VIDALIA — Mayor Buz Craft said he supports the new jobs and business the Desai Hotel Group will bring Vidalia, but he doesn’t like the deal cut by the previous administration.

The Desai Hotel Group is building a TownePlace Suites by Marriot on the Vidalia Riverfront near Promise Hospital and could also build a second hotel, presently intended to be a Hilton Garden Inn.

Craft said under the Tax-Increment Financing bond used to build infrastructure, the deal struck allows Desai Hotel Group to get paid for their infrastructure work before Vidalia will be reimbursed.

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“We don’t have the funds to just shell out and wait so long for our return,” Craft said. “It is not a deal I like, but the deal has been made and we have to go forward with it.”

Vidalia has agreed to build the parking lot, Concordia Parish Economic Development Director Heather Malone said, while the hotel group will pay for the remainder of the infrastructure work.

Infrastructure work includes access road improvements, drainage improvements, site work, dirt fill, landscaping and flood protection. Dirt work for the project has already begun.

Vidalia is projected to spend approximately $700,000 on the parking lot, Craft said. Malone said the anticipated cost of the infrastructure improvements for Desai is approximately $4.5 million.

TIF bonds are used to build infrastructure for economic development projects using the project’s future tax revenues as financing.

The parking lot will be a public lot that Vidalia residents and visitors can use free of charge for events on the Riverfront, Malone said.

“If they want to park and use the Riverwalk, it will be open,” Malone said.

An Economic Development District consisting of the Vidalia Board of Aldermen has been formed around the hotel site. An additional 2-percent occupation tax as well as an extra 2-percent sales tax will be collected to pay for the infrastructure work.

Malone said the hotel developers would have to submit for reimbursement for the taxes collected from the board of aldermen. Once the developer receives the approximately $4.5 million, Malone said the town would be paid back for its portion.

Malone said she could not project exactly when that would be. Craft said it would be years before Vidalia is paid back.

Craft said he met hotel developer Sunny Desai this week and had a good visit.

“He is going to have to pay a higher rate of occupancy tax than his competitor,” Craft said. “He will employee 30 to 40 employees, plus it will have other benefits.

“I am glad it will employee people and I am glad we are getting a nice addition to our Riverfront, I just don’t like the way they went about doing it.”

Craft said he would have preferred the Desai Hotel Group be on the hook for all of the infrastructure costs and be reimbursed through the TIF program.

The TownPlace Suites is projected to be an approximately 87 room extended stay hotel. Malone said the hotel is projected to cost $7 million including permits and supplies.

The prospective Hilton Garden Inn is projected to be a 120 room full service hotel. Malone said Desai is not contractually obligated to build the second hotel.

“We have been informed that they are going to get this hotel operational before they begin the process to put in the other hotel,” she said. “If they don’t do the hotel, there will be no infrastructure related costs to be reimbursed.”

Both hotels together project to cost approximately $22,540.000.

Desai already owns the Holiday Inn Express in Natchez and has leased 3.7 acres on the Vidalia Riverfront since July 2014. The lease agreement calls for annual payments of $33,000 an acre for five years and the right to use the land for 99 years.