Last Thursday, there was a ribbon-cutting ceremony at the new Courtyard by Marriott hotel here in Alexandria. It’s the first-ever Courtyard property to locate in our region, a multi-million dollar investment in the Alexandria Mall complex, and a strong sign of confidence in our market from a national hotel developer. It was also smart and obvious. South MacArthur Drive is Alexandria’s premier hub of retail commerce, and perhaps more importantly, it’s also adjacent to Cabrini Hospital, which recently completed a massive, mega-million dollar expansion. Before the Courtyard by Marriott opened, the area was only served by low-budget motel rooms. To me, Marriott made a wise investment in an important area of Alexandria. And thankfully, they built a good-looking hotel.
But today on his website, Rapides Parish Police Juror Steve Coco, who represents Alexandria residents, posted a photograph of the newly-opened hotel’s parking lot as a way of justifying his belief that local hotel/motel business is “suffering.”
Rapides Parish Police Juror Steve Coco’s photo of the newly-opened Courtyard by Marriott.
Welcome to town, Courtyard by Marriott. Three days after your ribbon-cutting ceremony, your performance has already been publicly criticized by a parish official.
Oh! I can’t stop laughing….
Steve must be hard pressed to scribble about something…
Come on..there are more pressing problems than a Motel that just opened and is not putting out the No Vacancy sign yet…
My sides are hurting!!
If anyone were to look at the hotel-motel tax receipts for the past two years, they would easily be able to justify Steve Coco’s comments. Remittances steadily climbed up until 2008 to reach $617,001.39 for the 2% parishwide tax, but began to fall last year. 2009 brought in $610,514.33 for the same tax. So far this year (through October) only $492,318.37 has been collected. It would appear that unless a miracle occurs, receipts for the year will be well below 2009 collections.
Does this mean the industry is suffering? I would tend to say yes. Remittances are a reflection of occupancy, which has been off for the past two years. Simply adding new rooms to the marketplace does not indicate the industry is “booming”.
First, I never suggested that the industry is “booming,” only that it’s somewhat ridiculous to use a picture of the brand-new, just-opened Courtyard by Marriott to illustrate “suffering.”
As you point out, between 2008 and 2009, remittances were down around 1%, and between 2009 and today, they could be down around 3% (assuming recent trends hold steady through November and December). We’re not talking about double digit decreases; we’re talking about a decline of around 1% (Y1) to 3% (Y2) in tax revenues. Also, I disagree that there is a precise and direct correlation between total occupancy and tax revenues. For example, it’s completely possible for a hotel to decrease its ADR in order to drive up occupancy, yet still end up making slightly less than the year before.
But either way, I don’t believe a cursory review of single-digit (3%) decreases in tax revenues over a two-year period is enough to indicate that our local hotel/motel industry is suffering– particularly considering recent and planned future investments in our market, the overall national recession, the analysis performed by RKG Associates, and recent national projections from the Urban Land Institute.
The funny thing is, Rhonda:
If you compare 2004 hotel tax returns to returns we’ve received so far in 2010, there’s been a 41% increase.
Over the course of the last six years, we’ve seen huge growth and an extremely minimal contraction during the last two of those years.
With all due respect, just like your analysis of the public risk under the TIF proposal for your clients (and your recent comments that the City should have funded SPARC through sales tax increases on inner-city residents), I find your analysis of our hotel market performance to be fundamentally flawed. I also think it’s worth noting that the real purpose of Juror Coco’s post was to cast doubt on the Downtown Hotels Initiative, and I can’t help but recall your involvement in developing a TIF proposal for the purchase of the Hotel Bentley, a proposal that ultimately proved to be unsuccessful.
Again, with all due respect, I believe readers of this blog deserve to understand the greater context.
I never stated there was a 10% decrease – I believe that was Mr. Coco’s analysis of the numbers. If you read my comment you will note that I stated the receipts had been growing up until 2008. As for the use of the term “suffering” I guess that would depend on who you speak with and how much they have at risk with their investments. If local hotels are running 30% occupancy or less on a regular basis, they are suffering. They would be suffering here, in Baton Rouge, in New Orleans, in New York, anywhere for that matter.
I will agree hotels reduce their ADR in order to increase occupancy; however, in working with hoteliers and asking directly what their vacancy rate has been, I will stick by my initial opinion that occupancy levels are down. The increase in the number of available rooms has assisted in the increase of receipts in past years, as has the work of people to bring in meetings and sporting events.
I never stated SPARC should have been funded by increased sales tax on Alexandria’s inner city. Just so we’re clear, please explain where the funds for the debt service on these bonds is coming from? I believe, if I read the issue, from sales tax, which all of Alexandria is paying, despite the funding being directed in certain areas of the City. Sales tax which is currently declining.
I find it ironic this administration chose to seek alternatives to the plan presented by my clients four years ago and Alexandria is still sitting with an empty Hotel Bentley. Cyntreniks, which began their renovation of the King over a year later than the proposed date for the Bentley, is preparing to celebrate the grand opening of the King under Holiday Inn’s Hotel Indigo brand. And yes, they are making use of a TIF and other alternative financing mechanisms which Baton Rouge has embraced.
I have never shyed away from my involvement with the original proposal for the Bentley, nor have I been a detractor of the current proposal. I have followed the downtown initiative and am still waiting the day for the neon sign to be turned back on at the Bentley. I’ll just say this: It’s too bad Buddy Tudor and Brace Godfrey will not be around to see that day. I have not questioned the recent extension because I know of the difficulty in financing commercial and industrial projects in today’s environment.
Thank you for your measured and considerate response.
A few things:
1) I never suggested that you ever asserted that there has been a 10% decrease in hotel tax revenues. I believe this was first suggested by another blogger, a man who has been routinely discredited.
2) I think you would agree that you do not attempt to hide your nom de guerre. The statements you made, under your nom de guerre, about SPARC being funded by sales tax increases on the folks affected are now a matter of record. Alexandria has one of the best bond ratings in Louisiana; SPARC has not resulted in any additional tax burden for Alexandrians.
3) The TIF proposal for the Hotel Bentley would have captured any additional tax revenues generated in a struggling area of town and assigned them to facilitate the private-sector financing of a single private-sector development. With all due respect, it may have seemed like a great proposal for your clients; the problem is: In my personal opinion, such a proposal would be a disastrous public policy. Alexandria needs to get out of the hotel business. The Bentley is a privately-owned property. To be sure, the City– because it owns and controls both the adjacent Fulton Hotel and the Riverfront Center– is, by definition, a critical part of the puzzle, but reassigning a public revenue stream toward a single privately-owned entity is not and was never a good solution.
4) Again, with all due respect, it’s great that the King is finally being reopened. Remind us: How many years was it closed? The Bentley’s been closed for six years.
You did not answer the question regarding where the funds for the payment of debt service on SPARC bonds is currently coming from. I will state again, if I read the bond issues correctly, we the taxpayers are funding these projects through the dedicated sales tax and property tax for infrastructure. Funding which would normally be used in the budgetary process for things like closing the ditches on Culpepper Road – something that was supposed to occur for many years now.
How long has the King been closed? Well that would depend on how you look at it. The King operated as an office building from 1973-2004 before being closed. That would mean it’s been more than 6 years since the building was an income producing property and definitely more than 6 years since it operated as a hotel.
I too am looking forward to your response.
As everyone knows, SPARC is being funded through a generous donation from the Bill and Melinda Gates Foundation.
In all seriousness, I thought you were just being rhetorical. I wasn’t trying to be evasive. Of course it’s being funded through bonds, among other things. But I think it’s a little disingenuous to suggest that this is somehow circumventing funds available for other projects under the normal outlay process.
Just to be short and sweet NO TAXPAYER MONEY SHOULD HAVE BEEN USED TO FUND HOTELS OR PRIVATE VENTURES. DID THE COURTYARD GET TAXPAYER MONEY?Look how much taxpayer money went into the Fulton. Now the bank is suing the city . Why did we put forth so much money into a DEAD HORSE.
I know it’s easy to criticize the decision- one that was made nearly thirty years ago- to invest taxpayer dollars into building the Fulton hotel in Downtown. Right now, the City is attempting to get out of the hotel business. Plain and simple. The Downtown Hotels Initiative is not concerned with “funding” a private venture; it’s about finding a private-sector solution for both the Hotel Bentley and the Fulton by making targeted investments in publicly-owned infrastructure. Your premise is wrong.
I’ve read some of the things you’ve written about Downtown Alexandria, and I wonder: Do you actually have a policy recommendation or do you simply think Downtown is a dangerous place that should be cordoned off and abandoned by the private sector, policymakers, planners, and elected officials? (Incidentally, Downtown is, believe it or not, a fairly safe area– in large part because no one lives Downtown). It’s hard for me to believe people who champion themselves as protectors of the public interest when they’re not fully informed and when they espouse a belief that promotes negligence and neglect; promoting a public policy of negligence and neglect, particularly when it’s a policy that deals with publicly-owned assets (like the Fulton and Riverfront Center) is, essentially, an endorsement of mismanagement (and, I believe, malfeasance).
Does Bill Gates ever contribute to Christian or non political causes? Such as animal rescue?