The issue of government incentives for private firms continues to draw controversy. How much is too much?
The saga to bring the so-called Pink Palace in downtown Bradenton back to life has left several people feeling blue.
The latest snag: A potential project to turn the property into a Hampton Inn, one of the first serious redevelopment attempts in several years, hit a stalemate over how much money in government subsidies will be available. The property, officially called the Manatee River Hotel, is on 10th Street West.
The deadlock essentially means a redevelopment of the 86-year-old pink building, which has been both a hotel and a retirement home in the past, could yet again fade away. The building is considered an eyesore by many, although it holds a prominent place in Bradenton history, with a rumored past guest list that includes Al Capone and Babe Ruth.
“We don't want to give up on the development just yet,” says Brian Long, director of development with Syracuse, N.Y.-based Widewaters Group, which owns the building. “But it has to be financially feasible for us.”
The Bradenton Downtown Development Authority likewise took what it considers a financially feasible approach. The DDA authorizes subsidies and incentives for private firms to advance a city revitalization effort.
“We would all certainly like to see something done there,” says DDA Vice Chairman Greg Green. “But we can't spend ourselves into a negative position like the federal government can.”
Widewaters got things going in late March, when the firm formally asked the DDA for $4.5 million in grants, incentives and tax breaks for its proposed project. The application included a request for the DDA to pay any increased taxes on the building for one year from its current valuation of $90,000.
In return for the subsidies, Widewaters proposed a 115-room Hampton Inn and Suites on the site, a $17 million project that would include a large component of historic preservation. Widewaters bought the property out of foreclosure in 2009; it has been vacant since 2005.
“This (could be) an extremely unique property,” Long recently told the Business Review, partially in response to criticism from some city leaders and residents who say the project is “only” a Hampton Inn. “It would be very upscale for this flag.”
Widewaters revised its request for $4.5 million in aid to about $3.8 million in early April. Long says incentives are a must because the company otherwise won't make back its investment. Widewaters has built $1 billion worth of commercial real estate since the early 1980s, including 20 hotels.
At an April 12 meeting the DDA offered Widewaters $1 million. The grant would cover improvements for the hotel's facade and streetscapes. Green, a CPA and a partner with Bradenton-based accounting firm Shinn & Co., says the DDA has to balance the potential for this project with its budget for other projects.
Widewaters rejected the $1 million offer.
Green and Long now both say the project is at a standstill. Green says the DDA is open to discussions with Widewaters, but the authority won't get into a bidding war with counteroffers. Long, meanwhile, says Widewaters will consider other options, including possibly selling the building.
This is the second time in 2011 the DDA has found itself in the news for incentives. The previous time, in February, the DDA approved $250,000 in rent and construction subsidies to woo the owner of Ezra Cafe to move the restaurant downtown from west Bradenton. The owner, Donna Eason, ultimately rejected the incentives, partially after she heard negative feedback about the process.