March 25, 2013

Tax Incentives Granted to Downtown Marriott Hotel

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Some workers in Tompkins County “were a little disappointed” by the Tompkins County Industrial Development Agency’s decision March 20 to grant proposed Mariott hotel tax incentives, according to community organizer Linda Holzbaur of the Tompkins County Workers Center.

By a vote of six to one, the IDA approved the company’s application for a tax abatement for the proposed 10-story, 159-room hotel at the east end of the Commons. In the weeks leading up to the vote, the Workers Center had expressed concerns about whether the Marriott had policies in place to ensure it will have a diverse workforce, pay competitive wages to employees and employ local construction workers.

“Offering a living wage to local employees and employing local construction people didn’t seem like too much to ask,” Holzbaur said. “At least, we didn’t think it was.”

The company promised to pay 156 percent of the state’s $7.25 minimum hourly wage to housekeeping staff. However, this payment would be offered only to housekeeping staff, rather than to all employees, according to Holzbaur. Some workers at the hotel would be making only $8 per hour, she said, making it “difficult to make ends meet.”

Holzbaur said she worries that hotel workers will face the same fate as employees at Ithaca’s “big-box” stores such as Wal-Mart, who she said still qualify for food stamps and Medicaid.

“While we believe in those safety-net programs, we don’t believe in full-time workers having to get those kinds of subsidies,” Holzbaur said. “If we’re subsidizing building the hotel, it seems we shouldn’t have to also subsidize its workforce.”

Still, the benefits of providing the tax incentives outweighed the negatives, said Heather Filiberto, director of economic development services for Tompkins County Area Development.

“One legislator, who put it very eloquently, said, ‘You always want a project to be perfect, and they never are, but this one’s a really good one,’” Filiberto said. “They really had to weigh community concerns with the benefits, and some of those were financial benefits.”

The hotel will contribute $3.4 million to the City of Ithaca in property taxes over the next 10 years, according to Filiberto. The tax benefits will amount to about $13 million, according to an editorial Ithaca Mayor Svante Myrick ’09 published in the Ithaca Journal the day of the vote.

In the editorial, Myrick expressed his support for the tax incentives, without which developers of the hotel said the project would be infeasible.

Myrick also emphasized the benefits of having the hotel downtown. Visitors to the city would frequent local businesses rather than nationally-owned chain restaurants, and a downtown hotel would contribute property and sales taxes to the city, he said. Also, the hotel would utilize city parking garages, rather than replace green space with pavement, he said.

“Compared with their sprawling counterparts, downtown hotels are friendlier to the environment, contribute more to the economic health of ordinary Ithacans and contribute more to the tax base,” Myrick wrote. “Without the temporary tax abatement, the hotel will not be built, and more hotels will be added in sprawling locations. By committing ourselves to perfect yet unattainable standards, we would be losing out on a terrific project.”

Original Author: Sarah Cutler