Heartbreak hotel, that's what some fear a hotel at Ford Park might become for other hotels in the area, especially if both the City of Beaumont and Jefferson County don't collect taxes from the Ford Park hotel.
On Tuesday, the Beaumont city council will discuss offering Pate Development, out of Wichita, Kansas, tax incentives to build a hotel and waterpark at Ford Park.
Jefferson County has talked about offering the interested developers a tax break, mainly waiving the hotel occupancy tax that all hotels must pay.
The county believes it would be a greater incentive for the city to offer the break, since the city's portion of that collection is greater.
But the general manager of the MCM Elegante, the Golden Triangle's largest hotel, is concerned about the proposal.
Bill Bianchi says the bottomline is that too many hotels have been built in Beaumont, and that's reduced occupancy and rates.
The manager of the Holiday Inn on Walden Road, Charles Watts, says since 2009, hotel overbuilding in Beaumont has cost the city more than $5 million in hotel/motel taxes.
He wrote a letter to city council members and county commissioners to convince them not to grant tax abatements, which would mean taxpaying hotels and motels would subsidize the one at Ford Park.
This is the letter he sent:
An Open Letter
Jefferson County Commissioners' Court
Beaumont City Council
Subject: Hotel Tax Abatements
I am writing in protest of any requests for abatements from Hotel Occupancy Tax and property taxes for those wishing to develop a hotel at the Ford Park location.
Such abatements, even for a specified length of time, would provide an unfair advantage over those hotels in the city and county that have and will continue to be required to pay the full amounts.
The Hotel Industry in our county is already struggling with overbuilding as well as the economy over recent years. There are a number of hotels up for sale, several in receivership, and quite a few behind in their tax payments. Area-wide occupancy is averaging very close to 50%, when a 65-70% is generally required for a profitable operation that can pay its bills, payroll, and taxes.
Adding another hotel into the mix will further dilute the average occupancy. Providing tax abatements will also give them an inequitable financial advantage. A new hotel at that location could not generate enough business to survive without taking a substantial volume away from existing hotels, further exacerbating the current problems for those hotels paying their full tax bills.
We all want the Ford Park Event Center to be successful and recognize the desire to have a hotel attached to the center. However, giving such a hotel an unfair and inequitable tax advantage is not appropriate. If the developer and Ford Park have not already done so, a comprehensive feasibility study should be done to try to determine what the impact of a hotel of the proposed size and facilities will actually have.
I urge all elected officials to oppose any tax abatements for one private company, to the detriment of others, in a highly competitive market.
I have attached an excel spreadsheet that shows due to the hotel overbuilding in Beaumont that HOT taxes are down over -$5,000,000 when compared to 2009 due to the rate decline.
Holiday Inn Beaumont
Watts also told 12News that as a result of the weak hotel market in the Golden Triangle, the company that's owned the Holiday Inn on Walden Road for about 30 years, has put the hotel up for sale.