Feasibility study would be a first step toward potential tax credits

The Washington City Council will mull a request by the Washington Harbor District Alliance for the city to provide $17,000 for a study to determine if a hotel in downtown Washington is feasible.

The request was made by WHDA spokesmen Chris Furlough and Joe Blalock during the council’s meeting Monday. The council made no commitment to the alliance, other than to say its request will be discussed during the council’s upcoming work sessions on the proposed 2011-2012 budget for the city.

WHDA is working with the National Development Council on a possible hotel project in downtown Washington, Furlough and Blalock told the council. The council wants the study on the feasibility of a downtown hotel, said Blalock, chairman of WHDA’s hotel team.

Furlough, chairman of WHDA’s economic restructuring committee, said the committee is ready to implement the revitalization plan for the city’s downtown and waterfront areas. The plan, adopted by the city in 2009, calls for creating a downtown harbor district that includes activity centers and districts along with a diversity of uses while maintaining the public’s access to the Pamlico River.

The plan calls for “investments” to improve the quality of life in Washington, with those investments being made by the public sector, the private sector and public-private partnerships.

Prominent components of the proposed strategy include a waterfront hotel, pavilions for public or private functions, small parks and green spaces and buildings for economic-development uses such as restaurants, a museum, a ship’s store and similar retail uses. It also calls for Festival Park to be built just west of the N.C. Estuarium (that project is under way), and a public pier and gateway to the downtown-waterfront area where Main Street, Stewart Parkway and Gladden Street intersect.

The city would recoup its $17,000 from the developer of the downtown hotel, Blalock told the council.

“It’s a great subsidy for the hotel project,” Blalock said.

Councilman Doug Mercer pointed out that if the city pays for the study but no developer comes forward to build the hotel or if the study determines a downtown hotel is not feasible, then the city is “on the hook for the 17 grand.”

The idea for a downtown hotel is not a new one. Several proposals for such a hotel have been put forward in the past 15 years, but none have come to fruition.

Blalock said NDC has $75 million in new-market tax credits it can allocate during 2011. Washington’s downtown district is eligible for such tax credits if projects there meet certain criteria, he said. NDC also helps locate prospective investors for development projects in such districts, he said.

“They’ve done this for many years and allocated hundreds of millions of dollars in tax credits,” Blalock said. “We’ve had them down here. … We’ve talked about getting in their pipeline.”

Getting in that pipeline requires having the feasibility study performed, he said.