While most City Council finance committee hearings are yawn-worthy, Thursday’s hearing will more closely resemble the movie “High Noon.”
Brook Lenfest, the scion of the region’s most generous philanthropist H.F. Gerry Lenfest, is requesting authorization for $33 million in Tax Increment Financing (TIF) for a combined W/Element hotel he is planning to build at 1441 Chestnut St. The site already receives the standard 10-year tax abatement.
The city’s existing luxury hotels, such as the Four Seasons, Ritz Carlton, Sofitel, and Kimpton’s Palomar and Monaco, have written a letter opposing TIF approval for the hotel. The group, which calls itself the Concerned Hotel Owners of Philadelphia, fears the city’s downtown hotel market is not strong enough to absorb another 700 rooms on top of what is already planned without cannibalizing business from existing properties, according to their letter.
The city supports the TIF authorization, which serves as collateral for a bank loan and does not require a financial outlay from the city. Julie Coker, senior vice president for the Convention Division at Philadelphia Convention and Visitors Bureau, will be testifying in favor of authorizing the TIF at the hearing.
Twenty years ago, she said, there were only about 5,000 hotel rooms in Center City. “Since that time, the city has strategically invested in doubling the number of hotel rooms in the downtown area to more than 11,000. New development is critical to shaping Philadelphia’s vision for a world-class city in the long-term and helping to bring convention business and travelers to the city.”
Lenfest finds it “hypocritical” the hotels, which are signatories to the letter opposing the tax breaks for the W/Element, received tax breaks to build their hotels. He complained the other hotels were comparing apples to oranges in their analysis.
“Many of the hotels were a refit of an existing building and significantly smaller so the real measure is looking at the types of public monies as a percent of project costs,” said Lenfest. “The existing hotels took public money and in many cases they took significant grants that are coming out of the city and the state’s pocket that don’t have to be repaid. Most of the ‘public’ money that I have secured and that is proposed requires repayment.”