A plan to build a 104-room Best Western hotel on North Fish Hatchery Road was put on hold for at least two more weeks when an alder pointed out the developer still owed the city money.
Alders were planning to go into a closed session to discuss terms of the $10 million project, including $1.7 million in taxpayer financing, and possibly approve a developer agreement. Ald. Julia Arata-Fratta (Dist. 2) objected to even holding a discussion until “the developer pays the outstanding invoices he has with the City of Fitchburg.”
Mayor Jason Gonzalez immediately agreed and said in addition, he did not even want city staff spending their time on the project, which this year picked up where a previous developer left off.
“There’s no more work on this until he (developer Chuck Chvala) coughs up his $30,000,” Gonzalez told city administrator Patrick Marsh.
Whenever that happens, the city likely will discuss and possibly vote on the 14-page developer agreement with Chvala’s Capitol View Hotel LLC.
The city created a tax-increment financing district, TID 10, in 2015 to facilitate a similar project, a 120-room Sheraton Four Points hotel that would have torn down an existing church on Pike Drive in exchange for $2.5 million in assistance. The Best Western is on the same site, labeled as 2920-2924 Fish Hatchery Road, and would include a restaurant and rooftop bar, among other amenities.
Part of the Tax Increment Financing would go toward building infrastructure to connect the property to Fish Hatchery Road, and part of it is earmarked for demolition and cleanup of the existing property. The property contains Fitchburg Christian Fellowship church – which would move across the street – and an apartment building.
TIF is an economic tool that uses public financing as a subsidy for redevelopment, infrastructure and other community-improvement projects by capturing property tax revenue from all underlying taxing jurisdictions (the city, county, technical college and the school district) of the newly developed property.
The increased value of the land often pays off bonds taken out for infrastructure improvements. It can also be used as a rebate to the developer to make a project financially viable or provide a competitive advantage to the municipality or a particular area that is desirable for development. The payoff can take 20 years or more.