City tries to partner with County on hotel tax cut

Efforts to secure a small, name brand hotel has sent the City of Montgomery to Le Sueur County with a request to partner on tax abatement for the potential development. The request came in an April 14 letter from Montgomery City Administrator Brian Heck and was presented by County Administrator Darrell Pettis to the Le Sueur County Board at their April 19 meeting. 

In the letter, Heck stated that the developers, BriMark Construction, have told the City that they "would be interested in some type of public assistance".  Heck also stated that the estimated value of the completed 30 to 34-room hotel project is just over $1.7 million and could provide five to ten full-time jobs as well as potential for additional part-time employment.

According to Heck, the proposed site for the development does not qualify for Tax Increment Financing (TIF), which leaves tax abatement as the option. Pettis explained to the Board that because of tax forfeiture, the parcel is not eligible for TIF.

Heck communicated that the City had proposed an abatement of the city portion of the taxes in a 15-year step-down fashion. However, the developer was hoping for more savings, so the City has approached the County to partner on a 20-year abatement with a step-down in five year increments. 

"We feel that with the county participating in the abatement, the project may become more feasible to the developers," wrote Heck.

The Le Sueur County Board voiced concern over the 20-year time frame. Pettis noted that 20 years is the longest term allowed for abatement. The County has only entered into one such abatement program for a hotel, The Guardian Inn in Le Center, and that was for a ten year time period. The Commissioners instructed Pettis to continue discussions with the City.