May 19, 2011
FOR IMMEDIATE RELEASE
May 19, 2011
Contact: Sonya Moste, Director of Marketing and Public Relations
Atlanta’s Tourism and Convention Industry Receives Boost Through
New Hotel Project Funded Through the Atlanta Development Authority
ATLANTA – Today, the Atlanta Development Authority (ADA), the City of Atlanta’s economic development agency, began the process to provide valuable financial support for the construction of a new Hilton Garden Inn/Homewood Suites by Hilton in Atlanta. The ADA’s Board of Directors approved an inducement resolution authorizing the use of up to $44 million in Lease-Purchase bonds for the project. Construction is planned to begin this summer with completion slated for 2013. The city’s hotel room inventory will increase by 226. The combined hotels will also add convention and meeting space as well as 192 new parking spaces.
"This project contributes to Atlanta's $10 billion tourism industry, which provides roughly 223,000 jobs for the city, and adds to our broad portfolio of accommodations," said William Pate, president and CEO of the Atlanta Convention & Visitors Bureau.
The project will be constructed on an undeveloped parking lot at 10th and Williams Street in Midtown Atlanta. It is estimated that over 200 construction jobs will be needed. In addition, the hotel will employ about 100 permanent employees.
Lease-Purchase bonds are not revenue bonds or general obligation bonds of the city. The developer of a project finances the transaction through their lender and the transaction is structured so that the owner receives a 50 percent partial tax abatement on their property taxes in the first year of completion. This abatement decreases by 5 percent each year until they are paying 100 percent of their property taxes. This type of bond is a common economic development tool used by development authorities across Georgia and similar groups around the United States.
Local governments stand to gain $327,000 in new property taxes in year one. The current owner of the site paid $43,424 in property taxes in 2010. Once the tax breaks wear off, after 10 years, local governments may receive as much as $741,000 annually in property taxes.
This is the second Hilton Garden Inn project for the ADA. The first, adjacent to the Georgia Aquarium, received gap financing from the city’s Westside Tax Allocation District in 2008. Other hotels projects competed with the help of ADA include The Ellis (formerly Winecoff Hotel), Glenn Hotel, W at 45 Ivan Allen Plaza, TWELVE Centennial Park and TWELVE Atlantic Station.
“ADA has strategically focused on job creation projects in targeted industries and projects such this help increase the city’s ability to attract large scale groups/conventions through the use of public incentives that provide gap financing to projects that otherwise might not happen,” says Charles Whatley, Director of Commerce and Entrepreneurship at ADA. “Our expertise and leadership has resulted in the construction of 800 new hotel rooms since 2000 while also helping to finance new attractions and restaurants, ensuring Atlanta remains a top business and leisure destination.”
Since 2000, ADA helped facilitate the use of $493 million of public finance incentives to spur $3 billion in new capital investment for tourism related projects. According to Whatley, “Our biggest competitors, Chicago, Las Vegas, Orlando, continue to grow their convention infrastructure. It’s imperative that Atlanta keep pace.”
ABOUT ATLANTA DEVELOPMENT AUTHORITY
The Atlanta Development Authority is the official economic development agency for the city of Atlanta. ADA represents intown Atlanta, which has a population of 420,000 and growing. ADA is a research-based economic development organization, focused on residential, business and investment growth in the city. Visit www.atlantada.com.