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Aldermen OK tax break for downtown hotel despite some progressives’ opposition

Aldermen OK tax break for downtown hotel despite some progressives’ opposition

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Hilton 400 Olive Street

The Board of Alderman, after debate, approved tax breaks to help subsidize the renovation of the Hilton at 400 Olive Street. (screengrab from Google Street View).

ST. LOUIS — The Board of Aldermen on Friday endorsed giving tax breaks to help a downtown hotel pay for a $7.5 million renovation over the opposition of some in its progressive faction.

The measure would help owners of the Hilton St. Louis Downtown at the Arch at 400 Olive Street carry out the refurbishing, which aldermanic supporters say is needed as the hotel industry struggles to recover from sharp pandemic reverses.

“The last year has set our downtown back,” said the measure’s sponsor, Alderman Jack Coatar, 7th Ward. “This is a company willing to make a substantial investment downtown.”

But despite the board’s favorable 16-8 vote Friday, the issue may not be decided.

One critic, Alderman Megan Green, 15th Ward, said after the meeting that she has asked Mayor Tishaura O. Jones’ administration to renegotiate the deal, which was worked out under Jones' predecessor, Lyda Krewson.

Nick Dunne, a spokesman for Jones, said the issue is under review. The mayor has sought redos of some other development deals after taking office April 20.

“We’re talking about updating carpets and drapes and mini-fridges and things like that in the hotel rooms,” Green said in the aldermanic debate.

“We’re giving something to a major corporation to do a refresh of their facilities that we don’t extend to the average homeowner in this city.”

The measure would exempt 85% of personal property tax at the hotel for five years and 50% for the next five. Aldermen also OK’d waiving the sales tax on construction materials.

Coatar said the two incentives are estimated to be worth $400,000 and are needed for upgrades required for the owners, Ohio-based Rockbridge Capital, to keep using the Hilton name.

A 20-year abatement of tax on real property issued to aid a previous owner’s conversion of the circa 1889 building into a hotel still has a few years to run. Noting that, Green said the hotel already is receiving enough city support.

Coatar said extending the earlier abatement was “a nonstarter” and wasn’t even discussed.

The tax break would be issued by the city Port Authority. Under a law passed last year to expand its boundaries from the riverfront to take in the new soccer stadium site near Union Station, the authority must seek aldermanic approval via a resolution. The hotel site is in the authority’s expanded area.

The issue now goes back to the port agency to carry out the abatement. Green hopes Jones will intercede and seek changes in the plan.

Coatar said he had committed to the incentive package already worked out and “I’m not going to change the rules on people midstream.”

Meanwhile, another Port Authority tax break request, for a fertilizer company planning a $25 million retrofit of an idle factory just north of the McKinley Bridge, was given unanimous aldermanic approval.

Aldermen honor Glass

The board also passed a resolution honoring Dale Glass, who recently retired as corrections commissioner amid controversy over the mayor’s plans to close the city’s medium-security jail, also known as the workhouse, by July 1.

Aldermen, among other things, commended Glass for improving the workhouse and supporting programs to help prisoners re-enter society.

The kind words for Glass were in contrast to the sharp criticism Jones issued for the city’s “failed leadership” in corrections when she announced Glass’ decision to leave.

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