CORVALLIS, Ore. (AP) - Corvallis city officials are considering putting $4 million into a parking garage in partnership with developers planning a seven-story riverfront hotel.
The City Council made the proposal public Monday and could vote on it June 2, the Corvallis Gazette-Times reported (https://bit.ly/1giyskx).
The developers said the $23 million Hyatt Place hotel deal wouldn’t pencil out without the public money, but they said the city would benefit from developing a vacant property along the Willamette River and from adding needed parking downtown.
The hotel would reserve some of the 155 spots for guests, but it estimates that more than 60 would be available for the public at night, 100 or more during the day.
“We’re overbuilding the parking lot,” said Dan Whitaker, one of the developers behind the deal. “It’s a lot of parking.”
The city would issue bonds to pay for its share. It estimates annual debt service at up to $325,000, depending on borrowing costs. The city would own the garage. The hotel would manage it, collect parking fees, and make lease payments to the city of $70,000 a year.
The rest of the city revenue would come from property taxes and the city room tax.
Room tax revenues, however, could vary significantly depending on how successful the hotel is.
If the hotel’s occupancy averages 80 percent, the city’s financial projections predict a $7,900 annual net gain. But at 60 percent occupancy, it translates to a net loss of $56,100 a year.
Tom Nelson, who heads the Corvallis-Benton County Economic Development Office, said the estimates are conservative, and the revenues should more than cover the debt service.
Plans for the hotel initially called for a five-story structure with 130 guest rooms and a 109-space garage, but the plan grew into a seven-story structure with 121 rooms. The parking would be on part of the ground floor and all of the second, third and fourth floors, with rooms on the upper stories.
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Information from: Gazette-Times, https://www.gtconnect.com
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