Aug. 07--A city panel Wednesday offered Don Weber's development company $750,000 over 10 years for his Charmant Hotel project, significantly less than the $2.5 million in assistance he'd sought to convert the former Ross Furniture building downtown into a boutique hotel.
Weber Holdings had requested the $2.5 million cash grant as a "reverse TIF" -- annually refunding the company a share of the estimated $280,000 the hotel will generate in additional revenue in that tax incremental financing district.
But the city's Economic Development Commission instead recommended granting the company $75,000 annually from the district over 10 years -- the equivalent, they reasoned, of what the developer might pay in interest on a $2.5 million loan. It, in essence, would set the company up to obtain a "no-interest" loan.
Mayor Tim Kabat, who heads the commission, said it considered the proposed $10.5 million hotel an important renovation and historic preservation project downtown that justifies some help, but limited city dollars meant weighing that against the financial merits.
"It's not close to what they're requesting, but it is in support of the project," said Amy Peterson, city planning and economic development administrator.
Attorney Mark Hammond, who represented Weber Holdings at the meeting, declined comment afterwards, saying he needed to speak first with Weber. The CEO and founder of Logistics Health Inc. did not attend the meeting.
The commission also endorsed shifting the 116-year-old building at 101 State St. from the soon-to-close TID 6 to District 11, which is just across the street and has 17 more years. That transfer will take until at least mid-September and would require approval by both the city council and the Joint Review Board.
TID 11 already includes the three Riverside Center buildings put up by Weber and his wife, Roxanne, plus the Grand River Station transit center and a parking ramp.
Weber and his wife in December 2012 paid $1.5 million for the building, originally the Joseph B. Funke Candy Co. factory from 1898 to 1933 and the Ross Furniture store since 1961. Their son Nick is project manager.
Weber told the commission in July he wants to invest $25 million to renovate the five-story building into a 71-room luxury hotel that will retain many of the historic characteristics and become a destination that draws people into La Crosse. The business would have more than 110 employees, he said, though the city's offer calls for 50 new jobs, 25 of which must pay a minimum of $12.65 an hour.
The hotel already has been approved for $3 million in state historic preservation tax credits -- about what Weber said he has invested so far in the project -- and should receive another $3 million in federal credits.
The commission also offered a total of $350,000 in loans for a planned $3.1 million fitness and wellness complex on 12th Avenue South off Hwy. 16, just south of the retail area that includes Famous Dave's and Grizzly's restaurants.
Kara Schuster, who owns Snap Fitness-Bluffside farther south on Hwy. 16, can receive a $200,000 small business loan at 2 percent interest for equipment, plus a no-interest $150,000 loan generated from TIF financing. Both would be repaid over 10 years, starting in 2016.
The 33,000-square-foot business must create six new jobs that pay a minimum of $12.61 an hour.
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