2012-02-29 / News

Hampton Inn tax abatement rescinded, no tax abatement for Best Western


With a unanimous vote, on Feb. 16 Pleasanton City Councilmembers rescinded the tax abatement that they had granted to the Hampton Inn (next to the Atascosa Market) back in December.

Comprising the council are Mayor Clinton J. Powell, Jimmy Magel (Dist. 1), Abraham Saenz (Dist. 2), Janet M. Jackson (Dist. 3), J.R. Gallegos (Dist. 4), Roger G. Garza (Dist. 5) and Jeanne B. Israel (Dist. 6).

At the Dec. 15 meeting, council had unanimously granted a tax abatement to the Hampton Inn for a threeyear period. At that meeting, B.J. Patel explained the hotel would be built with or without tax abatement. However, the plan was that the tax abatement would allow the hotel to be LEED-certified (environmentally friendly).

Pleasanton City Manager Bruce Pearson and Mayor Powell explained that the hotel has since changed their mind. They decided not to make the hotel LEED-certified, as it would cost $500,000 more. Pearson said they were approached by the developer recently.

“They realized the tax abatement was based in large part in councilmember’s minds on LEED-certification, so we requested they send us a letter that they were not going to do LEED-certification,” said Pearson. “In fact the letter they sent us actually withdraws their request for the tax abatement.”

Following this decision, council voted against a threeyear tax abatement for the proposed Best Western Hotel Project at 1917 W. Oaklawn, as requested by Raj and Geeta Patel. Voting in favor of the abatement were Gallegos and Saenz. The Patels said they realized the Hampton Inn requested their tax abatement be rescinded. However, they wanted to go forward with their request. First of all, it would be no cost to the city, since it would be a delay of revenue that the city would not have received, if the project was not there at all.

“Over the next 20 years, from the future Hotel Occupancy Taxes and from the future property taxes, we estimate in excess of $1.5 million in tax revenues.”

Other benefits cited by the Patels included 15-20 employees. Also, hotels have a long life, unlike other businesses. Even without an oil boom, the hotel will remain.

“It is a unique business, so it is not like there will be 100 other people asking for abatements,” said the gentleman who spoke on behalf of the Patels. He also noted it is a high-risk business for the Patels. They were asking for the city’s assistance, as they have been outstanding members of the community for 17 years.

Powell responded that during the tax abatement workshop, Pearson explained to council that tax abatement was a way of doing things when times are bad.

“With an abatement, the revenue a city loses off of it... that burden gets pushed onto the other citizens. That’s just my opinion on it,” said Powell.

Following a motion by Gallegos to approve a three-year tax abatement, more discussion took place.

Magel said they spoke earlier at length about this issue and he expressed his concerns.

“I feel like you may be justified, but I don’t think you are justified to a point... there are other industries out there who would like to do the same thing,” said Magel. “We simply can’t do it, because we have to pass the differences on to our other businesses and other citizens.”

The city is in a strong economic position right now, Magel added. However, it is not known how long this will be the case.

Gallegos said he agreed with Magel to a point, but he also disagreed with him.

“I appreciate Geeta and Raj, that they have been here and been loyal for 17 years and they have surely paid their portion of the property taxes,” said Gallegos. “The increase in revenue that we are getting from the Hotel Occupancy Tax, if you are in a non-profit organization, that is receiving funds-- it has been enormous, the money they collect for that.”

Gallegos said he would rather have the Patels build in Pleasanton than in, for example, Poteet.

“We were going to give them a three-year tax abatement of $41,140.68. We have a lot more to lose if we lose them to another city,” said Gallegos. He added they have been an asset to the city.

Saenz said he totally agreed with Gallegos. He said that in the past a 10-year abatement was given to a business that has since shut down. The hotel business, however, is a different industry. They should be given a three-year tax abatement so they can get situated, explained Saenz.

“We need something like this. This city is growing and we have a lot of people now,” said Saenz.

Israel said she wanted the Patels to know how much they were appreciated and that everyone thought highly of them.

“This is a difficult situation, as far as making decisions like this. We’ve had a number of hometown businesses that are here, that have stayed with us and they all deserve for us to be looking at them as well,” said Israel.

Israel also added that in the future there will continue to be such difficult decisions. She wanted them to know that whatever decision council did make, their business was appreciated and they will continue to support them in the community.

Saenz said he was concerned that the money the city is going to lose will be lost forever and will be somewhere else instead.

Resident Landa Diaz said that regarding the Hotel/Motel Tax that comes in, part of that is distributed to the nonprofits. However, part of that is kept by the city.

“My point is, the city is not going to be out a tremendous amount of money if they are still getting a portion of that, that they hold back. I know the business owners that own the hotel here have worked very hard,” said Diaz. “They started with almost nothing and they are not going anywhere, as opposed to the business I know you are talking about. As soon as the tax abatement was over, they were up and gone.”

It is a unique business, Diaz later added and there is a need for it.

“If they are willing to give their hard-earned money that they have saved and their savings, then I think the City of Pleasanton should at least say that it is worth it to them, to put in all of their life savings to do this.”

Magel asked if the tax abatement was not granted, would the Patels stay in the city. Mrs. Patel said the Super 8 is already up and running, but regarding the Best Western they will have to decide. Land is cheaper up the street, headed west, added Gallegos.

Council also voted 5-2 to approve the request for waiving utility connection fees of $724 for the Best Western Hotel Project. Voting against the waiver were Magel and Saenz.

Stewart Planning and Consulting chosen for Master Plan

The council voted 6-1 on the recommendation from the Planning and Zoning Commission for the consultant to design the Master Plan for the City of Pleasanton. The council approved Stewart Planning and Consulting out of Austin, to design the Master Plan. Voting against was Saenz.

Pearson recognized the commission members present at the meeting. They included: Ben Garza, Mr. Lamb, Mr. Samsel, Mr. Franke and Mrs. Diaz. Some other members were unable to attend. The Request for Proposal was answered by 10 firms, explained Pearson. The meetings began by the Planning and Zoning Commission shortly after January 9. Six meetings have been held since that time.

Each commission member took some of the proposals and looked through them with a fine-toothed comb, noted Pearson. Some of the proposals were 25-50 pages long. They had to make sure they met the requirements of the Request for Proposal. They began to grade them. It was eventually brought down to three consultants from five, said Pearson. Those three were asked to give a presentation to the commission. Scores were summed up by Pearson and each consultant was given a time frame for their presentation, including enough time for questions.

After the scoring, it was recommended that all three be brought to the council. The following morning, staff discovered that one of the consultants did not produce a sealed envelope. Pearson was asked if all requirements were met if the envelope was not sealed. So Pearson said they would look once again at the Request for Proposal. It specifically asks for a sealed envelope, said Pearson. So the commission decided to have another meeting on Valentine’s Day. So the commission was ready to come forth with another recommendation. Ben Garza then spoke.

“When we started this several weeks ago, I told you that the goal was to really rate people on the highest quality, not necessarily the lowest cost,” said Garza.

The decision was cut down to two, highly qualified firms. Garza announced the two as Design Workshops of Austin and Stewart Planning and Consulting, also of Austin. Israel said she attended the meeting and watched the presentations. She commended them on giving an amazing presentation. They covered everything that the commission asked of them.

Other business

Members of the council voted 6-1 to approve the resolution allowing for Atascosa County Appraisal District office upgrades. Voting against was Israel. Mr. Rodriguez, the city’s representative to the Appraisal District, spoke on behalf of Chief Appraiser Michelle Cardenas. He explained the grand total of the project was $8,700 and included upgrades to the entrance of the tax office and making it easier for the handicapped. It also involves some ceiling work. Three-quarters of the taxing entities needed to approve it for the Appraisal District to go forward with it. Israel asked if it was budgeted and Rodriguez said it was.Arthur Troell was in the audience and said the city’s portion is 5 percent, which is about $450. Israel said she did not really have an issue with the cost to the city. Her position was to see how it is being funded and she felt a resolution was appropriate.

She said she would have liked to have seen more bids. Troell said there was only one approved that was licensed by the city that put in a bid on this project.

Councilmembers voted unanimously to move forward with the Pleasanton Brush Country Art Club’s art display, as explained by Pearson. He suggested the monthly display be moved to the left side of the reception desk. He also announced the Artist of the Year reception for Lee Ricks, which was held Feb. 23 at Pleasanton City Hall.

The council voted unanimously on the approval of the plat presented for the 3.062 acre Lauren Ridge Subdivision. Cude Engineers said this is being proposed along Uvalde Street. City Engineer John Metting recommended that the project be approved. He said the Fifth Street Sewer Project will improve sewer in the area. The first phase of that project was done 1 1/2 years ago. The second portion of that grant is coming up in the next few months, noted Metting. However, he hasn’t heard yet if the city was selected or not. That will solve the problems with sewer in the long run, including additional development to the north of the property that is being platted.

“For right now, the existing sewer is adequate to convey the sewer down to First Street,” said Metting. “Part of it goes down to Sixth Street and Highway 97. The other part goes on down to First Street.”

Regarding water, Metting said they will be limiting the number of taps under the road. He added drainage is probably the one thing council is most interested in. He said that project is just to the south of the Villages of Riata Ranch, which is a larger project.

That particular project had drainage problems from the beginning, said Metting. This needs to be in next year’s budget. He felt this newer project was not increasing the problem much more than what is already there.

The reimbursement of travel costs to city manager applicant David L. Huseman was approved with a 6-1 vote. Huseman’s reimbursement totalled $99.90. Voting against was Gallegos. Council also voted 6-1 for the reimbursement of travel costs to city manager applicant Gus Pappas. His reimbursement was $144.30. Also voting against was Gallegos.

During the monthly staff reports, Public Works Director Johnny Martinez reported that construction crews are continuing to install the 12- inch water line on Crestline. They have installed 986 feet since the last council meeting. They also did some fire hydrant flushing on West Oaklawn.The Street Department and crews are putting down base at the Atascosa River Park, on Veteran’s Memorial Parkway. In another four weeks, it should be ready for asphalt, noted Martinez.

Pearson first recognized the many employees attending the meeting to see how the process takes place, on their own time to gain insight and see how discussions take place. Regarding personnel training, he has identified some classes he will be sending employees to in the next couple of months.

The construction standards have been fully implemented, said Pearson. He added he could tell by the questions asked at the Public Works meeting that they had been reading the manual. He also discussed the developmental process, sitting down with engineering, administrative, permitting, fire marshal, etc. to see how they track processes of development in this city. Pearson also gave an update on employee benefits. He hopes to have some recommendations to the city council in the next budget year on what can be done. He is also looking at going to a universal e-mail for city employees. Perhaps they can use a specific system that is used for government entities. Thanks to Mayor Powell, said Pearson, they may be approached about a Wi-Fi system available to them, if they can use their tower for signals.

Return to top