PRESENTER: Presenter
Jordan Matney, Deputy City Manager
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SUBJECT: Title
Discuss and consider the approval of a resolution authorizing the City Manager to execute a Chapter 380 Economic Development Agreement with The New Braunfels Hotel Company
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DEPARTMENT: Economic and Community Development
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COUNCIL DISTRICTS IMPACTED: 5
BACKGROUND INFORMATION:
The City’s Chapter 380 Economic Development program Policies and Procedures outlines the requirements and process for proposed 380 Agreements. The proposed Chapter 380 Economic Development Agreement with The New Braunfels Hotel Company will promote local economic development, stimulate business and commercial activity, increase the ad valorem tax base for the City, and will preserve a historically significant building in the City’s Downtown area. Additionally, the Agreement will address the following 2024-2029 City Strategic Plan Principle:
Community Identity: Foster a sense of community for all City residents, preserve the City’s key historic and cultural assets, expand cultural programming, and take advantage of development opportunities that complement the City’s unique heritage.
Project Background:
The Faust Hotel is a historic landmark in Downtown New Braunfels and is on the National Register of Historic Places. Originally built in 1929 as the Travelers Hotel, it was renamed The Faust Hotel in 1936. It has since attracted tourists, conventions, and local visitors for almost 100 years, and is one of the only hotels built in Texas during that era still operating as a hotel.
The Faust is wrapping up a significant renovation project with a focus on preserving its historic structure and appearance while also upgrading safety, accessibility, and comfort to more modern standards. Areas receiving updates include the hotel rooms, event spaces, restaurant, bar, and kitchen areas. The original budget for the building renovations was set at $7M, but the project encountered significant areas of scope expansion beyond the original projections. The owner elected to undertake additional work not originally included in that scope due to concerns of safety, efficiency and longevity. Such changes, for example, included a complete removal and replacement of electrical infrastructure including circuit breakers, wiring, junctions and other components. Other improvements included replacement of the sewer main and complete restoration of the historic exterior windows. These projects, while not technically required, are examples of rehabilitation efforts outside the initial scope of work but serve to enhance and modernize the historic structure in downtown New Braunfels’ core.
The owner requested consideration for incentives from the City of New Braunfels in 2025 while the project was underway. The proposed Chapter 380 Economic Development Agreement would rebate all the Hotel Occupancy Taxes (HOT) generated by the hotel for five (5) years or $1M, whichever comes first.
ISSUE:
Consideration of a supporting resolution and a 380 Economic Development Agreement with The Faust to rebate 100% Hotel Occupancy Taxes for five years or $1M, whichever comes first.
STRATEGIC PLAN REFERENCE:
☒Economic Mobility ☐Enhanced Connectivity ☒Community Identity
☐Organizational Excellence ☐Community Well-Being ☐N/A
FISCAL IMPACT:
The proposed agreement would rebate new HOT funds the project generates up to $1 million or for five years, whichever is first.
Recommendation
RECOMMENDATION:
Staff recommends approval of the supporting resolution and Chapter 380 Agreement.