Only three people spoke at a public hearing Tuesday on a tax breaks for a proposed new hotel on Ruhlman Road, but they were all opposed to the plan.
The Niagara County Industrial Development Agency board is expected to consider assistance for the $3.9 million, 66-room Holiday Inn Express at its meeting Thursday.
Mayor Thomas C. Sullivan said he and the Council support the construction of what would be the city's fourth hotel, but he said they hadn't discussed the property tax break, which the IDA estimates would save the developer, Lockport Lodging Group, $643,000 over 10 years.
Sullivan said he will poll the aldermen at a Council work session today and fax the results to the IDA in time for its meeting at 2 p.m. Thursday.
Alderman Patrick W. Schrader, D-4th Ward, was one of the speakers at the hearing in City Hall.
"I hate to give up taxes and things the City of Lockport desperately needs," he said. "I'd have to lay that burden on the other people in the city."
IDA Assistant Director Larry D. Witul answered that the IDA gives tax abatements only on the increase in assessment that results from a project, not the pre-existing real estate. "We are not reducing or taking taxes away," he insisted. "We always try to have a net gain in property taxes."
Witul estimated the project would pay $3.5 million over the first 10 years in sales taxes, "job revenues" and payments in lieu of property taxes.
He said the hotel would be taxed at 20 percent of full value in the first year, and that would increase by 5 percent a year, reaching 65 percent in the 10th year. Full-value taxation would not occur until the 11th year.
Howard Mandel, an employee of the Lockport Motel, said that the business is adding 22 rooms to its existing 65 units and never asked for a tax break. "We do not object to any kind of competition. We just ask that the playing field be level," he said.
"It is not a question of the playing field," said Ram Patel, a partner in Lockport Lodging Group. "We are above the playing field. We are putting in a Holiday Inn Express. Obviously our operating costs will be higher. Our (room) rates will also be higher."
Patel said his will be a better hotel than the other three in the city, and thus won't compete for the same customers. He said Lockport Lodging's marketing research indicates a Holiday Inn Express won't hurt the others -- the Lockport Motel, the Comfort Inn and the Best Western-Lockport Inn, all within a mile of the 2.37-acre Ruhlman Road site.
Patel said the project will be canceled if the IDA aid package is not approved. "We will have to find another community," he said. If the IDA says yes, construction should begin this fall and the hotel should open in spring 2002.