Property tax relief is under consideration to attract a hotel into Warren County, a development appraised at almost $10 million.

David Hunt of Hunt Properties seeks to construct a Hilton Gen 8 Hampton Inn Hotel, along with restaurant and retail space on the empty lot on Sparta Street across from Saint Thomas River Park Hospital.

The hotel would have approximately 74 rooms with an indoor swimming pool and approximately 2,000 square feet of conference room space. A retail center would be approximately 20,000 square feet. The restaurant has not been named.

Plans for the project have been submitted to the Warren County Tax Assessor’s office and an appraisal has been set at $9.73 million.

Current property taxes on the empty lot are $6,685 annually. After development, estimated annual property taxes are projected to be $157,585.

For his investment in Warren County, Hunt has requested a property tax rebate from both local governments through the Industrial Development Board.

IDB director Don Alexander presented the deal, called Tax Increment Financing (TIF), to members of the city Finance Committee in hopes of gaining approval.

“This Hilton property is as nice of a facility as this area can command,” said Alexander. “This is going to be something we can be very proud of. It’s something that I would have no hesitation inviting my relatives to come in and stay.”

Alexander estimated, using the county’s appraisal on the project’s plans, the annual property taxes after development to be $157,585. Left unchanged, city government would receive $81,018 and county government $76,567.

Under TIF, $138,345 is considered “available tax increment” and by the agreement, that amount would be rebate at a rate of 70 percent to Hunt Properties, 29 percent to Warren County Schools and $1,383 to IDB for an administrative fee. The agreement would be for 20 years.

“He wanted a higher percentage, but we negotiated that down,” said Alexander. “We also wanted Warren Schools to get 29 percent. Tennessee Code Annotated lets us get a service report fee so that’s why we took 1 percent to handle all the paperwork.”

At the estimated amount of $138,345, Hunt Properties would have $96,841 of its property taxes returned, Warren County Schools would receive $40,120, and IDB $1,383 annually.
Alexander reminded officials the city of McMinnville will soon have a 5 percent hospitality tax on local hotels, and is currently in the process of designating that tax to the Tourism Development Board at 100 percent.

Alexander estimated, on $109 a night room rate and an 80 percent occupancy rate for 360 days each year, a 74-room hotel will generate $115,758 a year in additional taxes for the city. Likewise, Warren County government has a 5 percent hotel tax and it would also receive $115,758.

“Keep in mind, this is just the hotel tax and it’s already greater than the incentive for him to bring in his facility,” said Alexander. “We haven’t thrown in anything like sales tax or any other taxes. We haven’t thrown in the fact this could be a catalyst for bringing in entertainment venues, ball teams, and nursery shows. The list goes on and on.”

Finance Committee member unanimously approved the property tax relief. The measure will be sent to the full Board of Mayor and Aldermen for its consideration. If the deal is approved, Alexander will then turn his attention to obtaining Warren County government approval.