A developer intends to build a high rise hotel on land downtown.
The item would give the developer a 50 year lease on a piece of city owned property downtown for $1,200 per year.
The property is currently owned by the developer and is on the central appraisal district tax rolls for roughly $500 thousand. The property taxes are currently about $15 thousand a year.
The way the deal works is that the developer first gives the land to the city.
Then the developer will generously pay $1,200 each and every year for 50 years to lease the land.
There’s nothing we can do about it now. That horse is out the gate. The Hotel Association complained about it, but they only talked about how it was unfair competition for them. They never mentioned how it might affect the taxpayer, so no one cared.
The City cuts these deals with the ostensible goal of making downtown more attractive, to lure businesses, to spur economic development, to shift the tax burden from residential to commercial property owners. To do that, they cut property taxes for commercial property owners.
We lose a little bit on every deal, but we make it up in volume.