The Stevens Point Common Council approved an approximate $1 million developer’s agreement package with Cobblestone, a national chain of boutique-style hotels, to build a four-story, 60-unit hotel in the downtown area of Stevens Point on Center Point Drive.

The Council voted 10-1 to pass the agreement which includes a developer’s incentive in the downtown tax incremental district 6 (TID 6) of $850,000, all of which is expected to be paid back in full in 11 years through tax increment.

George Doxtator, District 1; Ryan Garrett, District 3; Heidi Oberstadt, District 4; Meleesa Johnson, District 5; Jeremy Slowinski, District 6; Mary Kneebone, District 7; Tony Patton, District 8; Mary McComb, District 9; Mike Phillips, District 10; and Shaun Morrow, District 11, voted to approve the developer’s agreement. Denise Mrozek, District 2, voted against the motion.

According to the developer’s agreement, Cobblestone will receive an $850,000 upfront incentive and be able to purchase the land – valued at about $150,000 – for $1, said Corey Ladick, Stevens Point comptroller/treasurer.

“The total incentive package is right around a million dollars,” he said. “That money will be recouped over 11 years and we’ll also recoup that with interest at an interest rate of about 4.2 percent. So, that is actually significantly better than what we can get keeping our money in the bank or investing it in other places,” Ladick said.

“I think it’s a wonderful idea to have a downtown hotel. As someone who lives close to the downtown area, I think the best place to be in Stevens Point is in the downtown area with the parks that we have along the riverfront, the Green Circle Trail and all the amenities and activities (available) in the downtown area,” said Liz McDonald, a Stevens Point resident who lives near downtown. “I can’t think of a better place for a hotel to be positioned. This hotel would offer visitors a choice. When we have guests that come to town, they don’t want to stay on the outskirts of town, they want to stay close to where we’re living and close to the things that are going on in the city.”

“TIF (Tax Incentive Financing) districts were only to be used for aging, blighted areas and job creation. The Cobblestone Developer admitted that hotels are not (large) job creators and this cleaned, newly-paved mall site is not blighted,” said MaryAnn Laszewski, Stevens Point.

“It’s not just about jobs. Different TIF districts are created for different reasons,” said Michael Ostrowski, director of Community Development. “The downtown TIF district is not a ‘jobs creation TIF.’ East Park Commerce Center, that’s a jobs creation TIF, you know, when we fill sites we look for jobs and high-value structures. But the downtown area is more of a revitalization TIF, a blighted TIF, to spur redevelopment activity within a blighted area,” he said.

“Some will question, ‘is the downtown blighted anymore?’ By definition, it still is,” Ostrowski said. “That’s what those TIFs are created for and that’s why having diversification of different industry sectors in your downtown is important. A hotel is another element to that, as opposed to just jobs, jobs, jobs. That’s great, however you need other components as well. You need services.”

Reid Rocheleau, Whiting, said he is against using TID incentives to spur economic development because it creates unfair competition and he doesn’t like the city saying Cobblestone is “paying it back,” because the city’s incentive package will be returned through what it would otherwise be paying in taxes.

“After the hotel is completed and it’s ready for occupancy, we (the city) would provide the $850,000 incentive and then the way that money is recovered is through the property taxes that are paid on the property,” said Cory Ladick, comptroller/treasurer. “Basically, with it being in a TIF district, those property taxes would goin to the TIF District. That’s how it would be paid back over the 11 years, plus interest.

“So, it’s not that they are paying taxes then paying something else on some other sort of city loan, but the way the city gets the return on its investment, or recovers that money, would be through the additional property taxes it generates,” Ladick said.

“Then also, as part of the developer’s agreement, Cobblestone has agreed to have a guaranteed minimum tax payment,” he said. “If, for instance, the assessment would go down or even if property taxes rates went down, you would still have them making up the difference. So, the city is guaranteed to get at least $102,500 in property taxes for the first 11 years.

“Then, over the 11 years, that’s what repays that. After the 11 years, that money has been recovered with interest and at that point we have about five years left on TID 6 and the money can be used to help repay some of the money the city has had to lend it,” Ladick said.

While it is true Cobblestone will pay back the developer’s incentive package through the taxes, it would normally be paying the city if no package had been offered, that’s Cobblestone’s benefit to a mutually-beneficial developer’s agreement.

“I would say that the developer’s agreement and the arrangement is beneficial to both the developer and to the city, and there have been developer’s agreements in the past that we’ve done where really all the benefit … goes to the developer,” Ladick said. “(A developer’s agreement) should be beneficial to both parties.”

City officials also said without the developer’s agreement perks, Cobblestone wouldn’t have chosen Stevens Point to build their next hotel because there is a long list of other communities who would.

“Would it be more beneficial (for the city) if they were to build it and not ask for any TIF money? From the city’s standpoint, if the development were to still go through, then yes. However, realistically, if we wouldn’t have been able to provide anything, then that development wouldn’t happen,” Ladick said.

“I don’t believe it would have happened (without a developer’s agreement). There are other communities that will offer incentives, and there are a lot of communities who would love a hotel in their downtown,” said Ostrowski. “Even before Cobblestone came along, we were looking for a potential hotel opportunity, and it’s challenging without any municipal financing to help support that.”

Without municipal money incentivizing a developer, it’s challenging to not only be attractive to a developer, but also to get one to build a project where it is most beneficial for the community, Ostrowski said.

“It’s pretty clear that if we weren’t able to offer some sort of incentive, they would have just as easily gone to another community that was offering an incentive. Was it the best deal for the city? Maybe not. Was it the best deal for Cobblestone? No … But I think it’s a very good deal for the city,” said Stevens Point Mayor Mike Wiza. “Yes, we’re having to front some incentive to get it to happen, but right now it’s a parking lot making nothing. So, we will be making some interest on that incentive as they pay it back through tax increment.”

Mrozek voted against the developer’s agreement because she said she felt there wasn’t a need for any additional hotel rooms in Stevens Point and building more would only shuffle the patronage business of local hotels around.

“I completely disagree with that because I know for a fact that we occasionally have to send people to hotels outside the city for events. I know for a fact people stay in Plover for events in Stevens Point,” said Wiza.

Next, Cobblestone will draft a site plan and present it to the Stevens Point City Plan Commission for its approval, but no timeline has been presented yet.

Wiza said his best guess, pending proper approvals, construction may be completed by spring of 2017.