PADUCAH — Paducah Mayor Brandi Harless is defending the city's decision to not include a hotel market study in the application to the state to create a tax increment financing district downtown.
The executive summary of the study says the purpose was to "inform" the city's application for a potential or TIF district downtown. The city paid about $35,000 for the study. The hotel study was not required for the application, but the Kentucky Cabinet for Economic Development says that hotel study is the type of information that could be included. The city chose not to include the application, and we wanted to know why.
The TIF application was pre-approved without the study. The TIF application did not require the city to send the hotel study. Whether it would be sent was up to the city's discretion.
We spoke to the mayor two weeks ago about the purpose of the study, and this is what she had to say: "The purpose of this study was for the TIF application. OK? It was to say: If the TIF application is going to include the proposal of a new hotel, here's some data to back up the fact that possibly a hotel would do well in the TIF district." She said sending the hotel market study was not needed to do that.
We also have a contract between the city of Paducah and ConsultEcon, the company who wrote the study.
It says: "We understand the city of Paducah is looking to include a third party market assessment of the potential demand for a new hotel in downtown Paducah to include in its application for tax increment funds."
This is what Harless had to say after we showed her these documents: "We can have said that we wanted to have a hotel study done to inform the commission if we should include a hotel development in our TIF application at the same time as we could have used the knowledge that their was some level of confidence in the market to move forward with putting a hotel as part of the proposal in the TIF application."
Harless said the hotel market study was represented in the TIF application without being sent in its entirety to the state.
"It doesn't say a third party assessment document. It says an assessment of potential demand,” she said. “We used it to inform our decision that there was potential demand for a hotel to include in our TIF application.”
The application does not include the hotel occupancy rates, provided by STR, Inc., from the hotel market study. That study revealed that existing hotels average an occupancy rate lower than 60%. We were denied access to the hotel study that included the rates from STR, Inc. The city sent us a redacted version of the hotel market study that includes occupancy rates provided by STR, Inc., which is a private company that tracks supply and demand data for the hotel industry.
The centerpiece of the city's proposed downtown redevelopment program is a new 147-room hotel. The TIF application does include a summary of the economic impact of the hotel annually and a 20-year total.
City Commissioner Richard Abraham said he wasn't aware the market study wasn't included. "Did you have to add it? No. Was it required? No. Did we think ... if we didn't do it, it would hurt what we're trying to do? Maybe."
However, Abraham said he doesn't believe the city had bad intentions by not sending the study. We've previously told you the hotel market study showed a decline in hotel occupancy rates at hotels in our area.
Does the city plan to ever give the state the hotel market study?
The mayor says if the state would ask for it during their final approval of the TIF application, they will give it to them.
Paducah city commissioners gave Local 6 the following statements about not including the hotel market study in the application:
"We have talented staff to do this type of work. I believe they submitted what was requested in the application or we wouldn’t have received the preliminary approval. The next step I believe is for a visit. I don’t recall any conversations about if it would or wouldn’t be included in the application. It provided the commission the information we needed to decide to go ahead with the application."
"The hotel study was done to give us information about what kind of developers we could attract. I’ve read it twice, and it indicates a boutique hotel and a second hotel by the convention center could be successful. Of course good investors are key to the success of any development or business. In terms of the TIF application, we had professionals determining how to best make that application and this information was not included at that time. It would be given to them if requested."
"My motives are to never hide anything from the taxpayers. That’s not who I am. I always try to be consistent with what I say. I never got that memo. I don’t think we ever had that conversation as a group, but again what we are trying to do is to enhance the city. I think those types of things happen."
We have not yet heard back from City Commissioner Gerald Watkins.
No one from the city was able to tell us who made the final decision not to send the hotel market study they paid around $35,000 for.