Clear Lake council expresses intent to enter into loan agreement for Courtway Park project
CLEAR LAKE — The Clear Lake City Council last night approved a resolution expressing the city’s intent to enter into a $4 million urban renewal economic development loan agreement as part of the Courtway Park Subdivision project.
The council also reviewed a draft development agreement between the city and WillowStream LLC for a proposed $16 million hotel and conference center development on a 5.8 acre piece of land on the far southwestern part of the subdivision. City Administrator Scott Flory says groundbreaking for the project is anticipated for next month. “The developer shall develop the property by constructing and maintaining an approximately 75 room, not less than midscale to upper-midscale hotel brand project. Number two, a restaurant. The developer shall improve on the property by creating an approximately 5000 square foot restaurant. Number three, a conference meeting and event center. The developer shall improve the property by creating an approximately 8500 square foot conference, event and meeting center.”
Flory says as part of the development agreement, the hotel would have to create a minimum number of full-time jobs and there would be a minimum assessment agreement on the property. “Not less than $4.5 million taxable valuation during years one through four that the loan agreement would be forgivable. During years five through eight, it would be not less than $5 million taxable. In years eight through 12, it would be not less than $5.5 million taxable. Job creation and maintenance, the developer agrees to create not less than 25 full-time equivalent positions, and of course they would be under the obligation to maintain those throughout the term of the development commitments under the terms of the development agreement.”
Flory says a market study shows Clear Lake is not capturing corporate travelers and group sales like reunions, weddings and other events. “We are not competing well in terms of group room rentals and we’re not at all competing in terms of the corporate traveler.I think given this project and given its location, we stand to be in the market on that.”
Flory says the debt service on the $4 million loan would be substantially recouped by hotel-motel tax and property tax revenues. “Essentially this project really pretty well stands on its own. When you look at the new property tax dollars that this project will create in property tax revenues, and that’s based at the $4.5 million level, and then you combine that with the anticipated room sales and what our local hotel-motel tax is at that rate, which is at 7%, you pretty well cover your debt service payment between those two.”
Flory says the council will consider approving the development agreement at either their next meeting on October 21st or a special meeting before that.