Item 20: Chapter 380 Economic Development Incentive Agreement - 429. N Guadalupe Street.

[COSM_Admin]

Consider approval of Resolution 2025-126R, concerning Project Cat Tree and approving a Chapter 380 Economic Development Incentive Agreement with Midway Development, LLC, providing incentives in the form of partial rebates of hotel occupancy and sales taxes over ten years for the construction of a full-service hotel in downtown San Marcos with a minimum capital investment by Midway of $40,000,000.00; authorizing the City Manager, or her designee, to execute the appropriate documents related to this agreement on behalf of the city; and declaring an effective date.

 

[JHughson]

I am quite surprised to see "downtown" used here because this block is NOT downtown on any of our maps and could lead the public into thinking this will take more property off the tax rolls. Fortunately it will not since the agreement states this project will be on the property tax rolls.

For the public who may be reading this, the building will replace the Richard A Castro building/Admissions which was located at 429. N Guadalupe Street.

 

[arodriguez7]

Pg. 653 - Points for Consideration

• What do we mean by “Incentive request to help “prove-up“ the market”? I’d like to not infer.

pg.654 - Proposed Agreement Terms

• Given there is no graph under “Potential Revenue to the City” related to the “construction sales tax rebate”, is it correct to assume that there will be none?

 

[COSM_Admin]

Response provided by Christian Smith, Economic & Business Development Manager:
I am quite surprised to see "downtown" used here because this block is NOT downtown on any of our maps and could lead the public into thinking this will take more property off the tax rolls. Fortunately it will not since the agreement states this project will be on the property tax rolls.
Note: The message board has also been updated with the address 429 N. Guadalupe Street.

For the public who may be reading this, the building will replace the Richard A Castro building/Admissions which was located at 429. N Guadalupe Street.

arodriguez7
Council Member​

Pg. 653 - Points for Consideration

• What do we mean by “Incentive request to help “prove-up“ the market”? I’d like to not infer. There are no full-service hotels in San Marcos and none of this size along the I-35 corridor between Austin and San Antonio. This incentive helps make it financially feasible to construct this product type in San Marcos and demonstrate that the local market can support projects like this.

pg.654 - Proposed Agreement Terms

• Given there is no graph under “Potential Revenue to the City” related to the “construction sales tax rebate”, is it correct to assume that there will be none? The agreement allows for the rebate of sales taxes generated from the purchase or lease of construction materials and equipment between the start of construction and the Construction Completion Date. We do not anticipate the City collecting that revenue during this period, although those rebates are still subject to clawbacks if the property becomes tax exempt.