Owners, managers feel tax incentives hurt hotels outside Downtown
El Paso City Council made a big decision this week that clears the way for city and state tax incentives for two hotels Downtown.
One is the Camino Real, which is getting a $70 million facelift. The other is the $24 million Marriott Courtyard Urban Hotel that’s going up right across the street from Southwest University Park on Santa Fe Street.
The city said these incentives and rebates are designed to further Downtown redevelopment and secure additional investment. They hope to stabilize and expand the tax base.
But some hotels felt it makes the playing field uneven.
“I think that kind of puts this hotel and maybe others in this area at a disadvantage, because we don’t get those incentives,” said Danny Padilla, past president of the El Paso Hotel-Motel Association and current general manager of the Hyatt Place near Bassett. “We’re having to increase our rates a little bit more so that we can compensate for that and if we’re going to bid against some of those hotels that are getting the tax incentives, they can actually lower their rates because they don’t have the expenses of that taxes that they are not having to pay.”
The Camino Real incentives are for eight years and allow a 100 percent city property tax abatement, totaling more than $2.2 million. The Marriott Courtyard is a 12-year city incremental property tax rebate totaling more than $800,000.
City Rep. Cortney Niland said the hope is by providing tax breaks for a period of time, they can eventually grow the tax base and flip most of the burden from residents to businesses.
“The only way we’re going to do that is by growing our retail, commercial and private sector investment in these key areas,” Niland said, pointing out any hotel can apply for incentives. “If you’re looking towards investing in any part of El Paso, these incentives are incentives that are available to everyone.”
Padilla said he believes its important to revitalize Downtown, but still feels there’s a competitive advantage for hotels that receive incentives during the duration of these terms.
