Hotel & Motel Management - May 5, 2008 - (Page 12)

12 Consultant’s Corner IN THE details Studies bring incentives Demonstrate project beneﬁts Gain ﬁnancial backing Short- and long-term effects H&MM May 5, 2008 | HotelMotel.com www.HotelMotel.com/digital_edition Economic impact studies help land ﬁnancing D By David J. Sangree H&MM Columnist evelopers planning hospitality projects often look to local governments for ﬁnancial assistance with their projects. An economic impact study is the best tool to bring developers and government representatives together. An economic impact study estimates the total beneﬁts of a project, including tax revenues, employment changes, additional spending impacts during the construction and operational phases, revenues from increased tourism, and other changes in the community. The study can be used not only to calculate ﬁnancial incentives, but also to demon- strate beneﬁts that may persuade communities to support a project. Many cities have provided incentives for larger resort and conference center projects through tax abatements, tax increment ﬁnancing, infrastructure support, marketing support and tax credits or rebates. We understand. $51,000,000 Westin Florida Construction / Mini-Perm Financing $46,750,000 Le Meridien Pennsylvania Construction / Mini-Perm Financing $21,200,000 Crowne Plaza Florida Construction / Mini-Perm Financing $14,500,000 Hampton Inn Texas Acquisition $14,030,000 Courtyard by Marriott California Construction / Mini-Perm Financing $9,250,000 Holiday Inn West irginia efinance $9,169,800 Hilton Garden Inn Florida Refinance $6,050,000 Fairfield Inn & Suites Indiana Construction / Mini-Perm Financing Not only do we understand your business, our lending solutions are flexible, scalable and tailored to provide you with the best solution possible. Our company was founded on the principle of helping our clients reach their challenging and ever-evolving business goals. We accomplish this through timely decisions, well-structured transactions, and superior customer service coupled with the highest level of confidentiality and ethical standards. CIRCLE NO. 140 The economic impact can be broken down into two phases: short term (construction) and long term (operation). Both phases generate income, employment and taxes in the affected region. The local community generally is most concerned about the additional employment and revenues a new development will bring. while government ofﬁcials generally are most concerned about the anticipated ﬁscal (tax) impacts. Economic impacts generally are measured on three levels: Direct effects include the jobs and spending directly created by the construction and operations of the development. Indirect effects result from production changes in downstream industries associated with the initial direct spending and employment at the facility. Induced effects represent the change in local consumption due to the personal spending by employees whose incomes are affected by direct and indirect spending. Combined, these three effects amount to the ﬁnal impact, which represents the overall economic impact of a change in ﬁnal demand on output, earnings and employment on a region’s economy. The ﬁnal impact is used in projecting the tax revenues a hospitality project will achieve which may include income, sales, bed, admission, real-estate and personal property taxes at city, county and state levels. Economic impact studies are a vital tool for policy makers, developers, hotel operators, city and county ofﬁcials, state tourism departments, and convention and visitors bureaus to envision the potential economic beneﬁts that may be realized from providing ﬁnancial incentives to a hospitality development. hmm@questex.com David J. Sangree (dsangree@ hladvisors.com), a member of the International Society of Hospitality Consultants, is president of Hotel & Leisure Advisors in Cleveland. Nuresh Maredia contributed to this article. Both can be reached at (216) 228-7000. We really understand. For more information, please contact Jon Wright Managing Partner jwright@silvertonbank.com 770.805.2350 Greg Friedman Senior Vice President gfriedman@silvertonbank.com 770.805.2365 Kevin Luyendyk Vice President kluyendyk@silvertonbank.com 770.805.2396 http://HotelMotel.com http://www.HotelMotel.com/digital_edition

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Hotel & Motel Management - May 5, 2008 Contents Pipeline Favors Established Companies 3 Palms Debuts in Upscale Tier Guests Want Reward Options Perspective Legally Speaking Marketing Matters Consultant’s Corner On Finance What Women Want Maintenance Doctor Trends & Stats Special Report: Top Hotel Brokers Design: Tune Into Music Programs Hot Products: PTACs On the Block: Silver Lining in Bleak Hotel Sales Market Events Transactions Supplier News Consumer Insight: The Importance of Creature Comforts When Traveling Ad/Editorial Index Marketplace Classifieds Checking Out

Hotel & Motel Management - May 5, 2008

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