By Michelle Charles
A hotel and convention center project that city leaders say will transform an empty tract of land on Duck Street, spur visitor growth and create opportunities that broaden Stillwater’s tax base, is moving forward.
On Monday, the City Council authorized the City Manager’s office to enter into an agreement with HK Development, a local company.
The project includes a convention center with 20,000 square feet of flexible meeting space and a parking garage for guests, attached to a 120-125 room hotel affiliated with a national flagship brand. It’s expected to cost a total of $28.3 million.
The City of Stillwater is fronting $6.2 million for construction that will be paid back over time at 1.75% interest.
Money to pay the loan will come through the City’s Tax Increment Finance District, which collects increased ad valorem and sales tax generated by the redeveloped property.
The deal also includes 2% of the lodging or visitor tax collected by the new hotel, which is expected to be operational by Sept. 2023.
Enough money is available from a cushion kept in the City’s general fund and the rate of return is more than the City could currently get elsewhere, Deputy City Manager Melissa Reames told the City Councilors, who were acting in their capacity as the trustees of the Stillwater Economic Development Authority. The developer is required to operate the facility for at least five years and the covenants and agreements made would transfer with the property if it were sold.
The City has approval over changes in the hotel brand to ensure consistent quality, Reames said.
Visit Stillwater President and CEO Cristy Morrison has spoken for decades about Stillwater’s need for a convention or conference center.
Having one will open the city up to new markets and increase the number of visitors, she previously said.
The facility will also bring visitors to Stillwater on weekdays – expanding the visitor window beyond game days, City Councilor and SEDA trustee Christy Hawkins said.
The Councilors also discussed the best way to schedule two different bond issues, a sales tax increase dedicated to transportation and a lodging tax increase on the ballot.
The Oklahoma State Election Board offers offers Feb. 8 and April 5 as upcoming dates for municipal and school elections.
Stillwater will be holding its mayoral election in February. A school election will be held in April.
The councilors discussed the advantages of grouping the issues together to attract more voters, but said they also see some value in splitting them up so voters don’t get overwhelmed or vote everything down because they don’t like one issue on the ballot.
The election resolutions still have to be drafted, but the councilors ultimately decided to place a request to increase a current one-half cent sales tax dedicated to transportation to a full one-cent and a request to increase Stillwater’s hotel or lodging tax from 4% to 7% and change the name to “visitor tax” on the February ballot.
The transportation sales tax would sunset after 10 years.
Two separate bond issues – $9 million to replace Fire Station No. 2 and $4 million to build a new animal welfare facility – will go on the April ballot to give city staff more time to explain them and make a case for why they’re needed.
When staff first presented the items for discussion, the increased visitor tax was not part of the package, but Morrison made a request to have it considered.
Other cities in the area either have higher visitor tax rates or are considering increases, she said.
According to the ordinance approved Monday, 70% of the visitor tax revenue would be used for marketing efforts and 30% would be used to help develop amenities.
Those capital projects wouldn’t just serve visitors, they would increase the quality of life for residents, Morrison said.