GCEDC board approves tax abatements for Holiday Inn Express construction

As a matter of "consistency," the Genesee Economic Development Center Board on Thursday approved tax abatements for a proposed Holiday Inn Express near the Thruway in Batavia.

The project will get a 60-percent PILOT (Payment in Lieu of Taxes), and relief from mortgage taxes and sales taxes on construction materials.

Several local hotel owners showed up for the meeting at the Upstate MedTech Center, but none where given a chance to speak. They previously expressed their concerns at a public hearing attended by GCEDC staff, but no board members. Last month, staff members presented a detailed report to the board on the owners' objections.

Mark Masse, senior VP of operations, said in a brief statement to the board today that he researched some of the claims made by hotel owners -- about the impact more hotel rooms would have on occupancy rates -- and concluded, "an analysis of the data could be interpreted in many different ways."

Past hotel projects that received GCEDC assistance included construction of the Best Western in 2002 and the Hampton Inn in 2002. In 2008 and 2010, local acquisitions of hotels received tax abatements (but no PILOT) and the Travel Lodge and Clarion have recently received PILOTs.

Masse concluded, "It's my recommendation as a policy decision to either be consistent with previous 60-percent PILOTS, mortgage tax and sales tax abatements, or is it the decision of the board not to help these types of projects going forward."

Board Chairman Hollis Upson spoke in favor of being consistent.

"There is some argument for the fact that additional rooms could be brought into the market without severe impact to existing hotels," Upson said. "It's certainly not the EDC's intention to harm any existing business, but we also want to be consistent."

After the meeting, the attorney for the existing hotel owners argued that there is no precedent for these tax abatements. He said the prior abatements for more rooms were granted years ago before the market was saturated.

"All of the data is that the 12-month occupancy rate never gets above 50 percent," said Thomas J. Warth, of Hiscock & Barclay. "Most of the properties are in the 40-percent area, and that's distressed property range."