As you are aware, the New Port Richey Hotel Group LLC is planning to construct an 89 room limited-service hotel on 1.20 acres of property located at 6206 U.S. Highway 19 and as indicated on the attached aerial photograph.  The hotel will operate under a franchise agreement with Choice Hotels as a Comfort Inn & Suites.  In case you are interested to know, the term of the franchise agreement is twenty years.

To begin, the property was purchased in September of 2021 for $1,250,000 for purposes of establishing a branded hotel. A branded hotel located in the Rivergate area with its close proximity to the downtown is likely, based on reasonable market assumptions to command a base taxable value of $60,000 per room (excluding land costs) and lead to significant upgrading of property values along U.S. Highway 19.  A base land valuation of $7.50 per square foot has been assigned to the Rivergate hotel property which is an increase from its current value of $4.69 per square foot as a vacant commercial parcel.  In as much as the 2.6 acre Keiser University parcel and the City’s Parking Structure Project have caused the values in the area to increase, depressed land valuations will continue in the corridor without the benefit of continued redevelopment of older commercial properties and areas including those located in the Rivergate area.

With that being said, a TIF Revenue Projection related to this project has been prepared by Mr. Ken Kreveling, President of Urbanomics, Inc. and has been attached for reference.  As you can see from the spreadsheet, the project is expected to yield an additional $1,129,564 in total tax increment revenues over a ten-year period of time with a modest annual valuation growth rate of 3%.  A twenty- year projection of total tax increment revenues is in the amount of $2,661,473.  The specific economic development incentive that is being recommended to support the project is a $250,000 grant for which payment is contingent upon a total expenditure of project costs in the amount of $2,500,000 and is secured through a dedicated retainage account with Flagship Bank which is the financial institution providing the construction loan to the New Port Richey Hotel Group LLC in the amount of $7,236,700.

Incidentally, if this project moves forward as planned the construction will commence in February of 2022 and it is expected to be complete in the spring of 2023.  At the completion of the project the market value of the building and property has been appraised to be $13,100,000.