HomeMy WebLinkAbout1992-211
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CITY OF STILLWATER
RESOLUTION NO. 92-211
SUPPORTING THE LOWELL INN EXEMPTION
FROM A LODGING TAX
WHEREAS, the Lowell Inn is the only full-service, year around hotel operation
in the City of Stillwater; and
WHEREAS, the Lowell Inn is the only transient lodging establishment in
downtown Stillwater; and
WHEREAS, the Lowell Inn real estate is the only transient lodging in the City
of Stillwater assessed for the downtown infrastructure/utility/street
improvement project; and
WHEREAS, the Lowell Inn has, (i) a transient lodging occupancy ratio decline
over the past ten years from 66% to the present 5D%, (ii) a present average
daily rate of $138, (iii) average revenue per available room of $69, and (iv)
excessive dependency upon a two-day weekend demand within the special occasion
market subsegment; and
WHEREAS, the economic viability of the Lowell Inn has recently been negatively
affected by the increase in commercial hospitality as well as the psuedo
commercial bed and breakfast lodging accommodations now growing by leaps and
bounds in the Stillwater area--from the initial 21 rooms provided by the
Lowell Inn--to over 160 rooms; and
WHEREAS, public subsidies provided to the Lowell Inn are limited to $20,000 of
tax increment financing (the public sector share of the 1991 joint parking lot
imrprovement project between the Lowell Inn and the City of Stillwater; and
WHEREAS, the consequences of this sudden and severe over-saturation are
multiple and have involved, over time, the erosion of the Lowell Inn lodging
market share from 100% to less than 30%. Some erosion has been expected and
even helpful in enabling the Lowell Inn to deviate from the civic duty of its
early years to provide low-cost commercial lodging. Unfortunately, the low,
operating cost commercial B & B operations are able to compete directly
against the Lowell Inn's high, commercial tax and assessment operating costs,
as a result of their ability to (i) use personal residences for business
purposes, within the residential district of the City of Stillwater, and (ii)
function as below-market, operating-cost, lodging establishments. and
WHEREAS, adding to and complicating the economic life of the Lowell Inn is the
high cost of the private ownership of downtown real estate and private parking.
This is a result of escalating commercial real estate taxation rates,
assessments for downtown improvements, and the $80,000 capital investment
portion for the Lowell Inn's share of the cooperative parking improvement
project with the City (80% private 20% public). B & B operations have a
double tax advantage from their residential real estate tax rate being
one-third the commercial tax rate plus 30% to 60% of market value (the first
$72,000 being taxed at Homestead Rates.
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NOW, THEREFORE, BE IT RESOLVED, that the City Council of the City of
Stillwater does hereby resolve its consent and suport for a specific statutory
exemption for Lowell Inn, Inc., the operating company of the Lowell Inn, whose
offices and transient hotel lodging operations are located in the three-story
hotel building at 102 North Second Street, Stillwater, County of Washington
from MS 469.190.
Adopted by Council this 6th day of October, 1992.
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ATTEST: ~CI~
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