Terre Haute City Council says no to tax abatement for proposed hotel

May 3—The Terre Haute City Council declined Thursday night to name an area near the intersection of I-70 and U.S. 41 (South Third Street) an economic revitalization area.

Attorney Richard Shagley represented Transcend Group LLC before the council. Transcend seeks to build a Marriott Extended Stay Hotel on the west side of US. 41, not far from the Chinese buffet restaurant just north of the interstate.

If the property was named an economic revitalization area, Transcend would have applied for a tax abatement totaling approximately $1.1 million over nine years.

The hotel was expected to represent an approximately $12 million investment and create 18 new jobs with an annual payroll of $540,000.

After nearly an hour of discussion, council members Jim Chalos, Curtis DeBaun, Anthony Dinkel and Cheryl Loudermilk all voted yes to the measure, while Kandace Hinton, Todd Nation and Tammy Boland voted against it.

Amanda Thompson did not attend the meeting, while George Azar had to leave early for another commitment.

Even though a majority of those present voted for the resolution, council rules dictate that any affirmative ruling needs five yes votes. With Thompson and Azar absent, the resolution did not meet the requirement and therefore was defeated.

Nation and Hinton both expressed misgivings about the project. Nation noted that tax abatements are usually given to companies building in an otherwise undevelopable location. That's hardly just off I-70 and U.S. 41, which he called "prime property."

"It's the busiest intersection in Vigo County," Nation said in an interview Friday. "There are hotels in all four quadrants there. The market makes sense for hotels to be there. There's no need to incentivize them."

Both Nation and Hinton observed that hotel employees not in management positions would make somewhere between $14 and $30 an hour. Nation said that tax abatements incentivize job creation, but the jobs that would emerge from this project were not worth $1 million in tax breaks.

Councilmembers agreed that discussion about more explicit, standing criteria for tax abatements was, as DeBaun said, "a conversation we've needed to have for a long time."

Paperwork describing how to determine what projects are worthy of tax abatements, Nation later said, is "flawed," he said. "There's an appetite in the council for revisiting what that form says."

Terre Haute Mayor Brandon Sakbun agreed, telling the council that the abatement score sheet should be adjusted over the summer.

Shagley said he did not know if the project would remain a go if Transcend Group did not receive a tax abatement.

Nation said Shagley could refile the resolution in the future with significant changes, such as reducing the length of the requested abatement.

David Kronke can be reached at 812-231-4232 or at david.kronke@tribstar.com.