Note: Commissioner David Guess was unable to attend this meeting.
Development Agreement with National Hospitality, LLC
At a called meeting of the Paducah Board of Commissioners, the Board approved a Municipal Order authorizing the Mayor to execute a development agreement with National Hospitality, LLC for the construction of a hotel on the city-owned property located at 519 North 3rd Street. This property is adjacent to the Holiday Inn Paducah Riverfront and within walking distance to the Paducah Convention Center complex in downtown Paducah. The City purchased this property in 2015 which previously housed a nursing home and hospital.
Mayor George Bray said, “I think their timing is good with the Sports Park being built, more rooms being required, and downtown still growing. It’s a good opportunity for us, and I think, growth begets growth.”
In the Municipal Order, the City agrees to convey the property to the developer; however, if the developer defaults, the city would be able to regain ownership of the property. The City and developer will agree upon the hotel’s brand and number of rooms. The hotel is to be completed within 24 months once an approved start date is set.
City Manager Daron Jordan said the developer is meeting with a national brand next week with the hope of announcing the hotel’s brand later this month.
Mayor Bray added, “Our understanding is that they need this executed agreement in order to negotiate their final agreement with the brand. It is a very recognizable national brand. This appears to be on a good track, but we are taking a lot of care with the development agreement by placing some clauses in there to make sure we can protect ourselves as much as possible. We are hoping for the best with these developers and are confident.”
Jordan said at this time, the hotel is proposed to have four stories, approximately 120 rooms, an indoor swimming pool, and a dining area. The developer plans to hold a public meeting to gather input on the hotel as well. Jordan added that the developer is anticipating a $15 million investment and have demonstrated they have the funding in place.
With the developer’s investment, the City is outlining an incentive plan to include the following reimbursements:
- Reimburse the developer up to $250,000 in infrastructure costs.
- Reimburse the developer up to $15,000 per year over a five-year period for payroll taxes.
- Reimburse the developer up to $100,000 per over a five-year period for real estate taxes.
The incentive package is not assignable to another party and requires the meeting of project milestones by the developer.
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