Arvada government now has a scheme to give away more than $2,7 million to a private, for-profit hotel developer.
Arvada Urban Renewal wants to sell publicly owned property valued at $3.2 million at a discount of 85 percent — for …
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Arvada Urban Renewal wants to sell publicly owned property valued at $3.2 million at a discount of 85 percent — for $500,000.
The Arvada Urban Renewal Authority and city government is again planning the most outrageous kind of corporate socialism that manipulates and distorts the free market.
This time for a Hilton Garden Inn to be erected just across from the scenic west wall of the Lowe’s Home Improvement store on Olde Wadsworth. City officials have decided that this is where a hotel ought to be in Arvada. The market place isn’t deciding the location; the hotel industry isn’t deciding; free enterprise isn’t deciding. The government is deciding.
Selling the property for only $500,000 to private, for-profit development corporation when “the price paid by AURA of $3,287,000” is most troubling. There are also tax giveaways as part of this deal.
What is happening in Arvada government to American values of the free market and entrepreneurship? Why are prosperous corporations like Hilton and Walmart being offered millions of dollars of subsidies from City Hall?
The Arvada Urban Renewal Authority itself admits that in effect, this is an unfeasible free market project — it is over $5.5 million short (AHI is Arvada Hotel Investors, the developer):
“AURA staff analyzed the development proforma, including TIF projections and construction estimates and verified that there is a financial shortfall of approximately $5,562,000 in AHI’s development pro forma. To address the gap, AURA will 1.) Discount the cost of the property to AHI from the price paid by AURA of $3,287,000 to $500,000 and 2.) Rebate to the developer the 2 percent lodging tax for a period of 10 years up to $800,000. The total value of the land discount and tax rebate is $3,587,000. The remaining financial shortfall in the development proforma of $1,975,000 will be AHI’s responsibility and serviced by the planned 6 percent PIF.”
This means that even with the millions of dollars of government subsidies to the hotel developer, they are still estimated to be nearly $2 million short of what they need to make a go of this project - the market place itself is announcing that this site is not ready for a Hilton hotel.
In simple terms: the Hilton developer cannot afford to build in Arvada without a $2.7 million property acquisition bailout from the government.
The government tries to paint “positive” impacts from this project. The alleged economic supplement to the city of $3 million is surely optimistic. AURA seems to assume that all hotel guests will hike up the hill to Olde Town or take a taxi to Walmart to benefit the “local economy” with their discretionary cash.
It might be nice if there were a hotel in Arvada ... but it should come here because the business conditions and the free market warrant it, not because the government is artificially subsidizing its construction.
The government of Arvada and its Urban Renewal Agency are blatantly manipulating free enterprise in its wolfish quest to engineer a new Olde Town. The Olde Town of urban renewal will bear little resemblance to the historic area that has characterized the family-friendly small town feel the most Arvada residents value.
Arvadan’s are practical, common sense, fiscally prudent Americans -- this deal does not reflect the values and principles of the vast majority of our wonderful city’s residents.
The details of the ‘Hilton Handout’ deal can be seen in following document:Arvada Urban Renewal Authority Board Meeting - January_7,_2015 | Packet PDFhttp://earthside.typepad.com/files/aura_packet-january_7_2015.pdf
The full article available at: arvadaforallthepeople.com/2015/02/hilton-handout-arvada-governments-hotel-bailout-scheme.html
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