Novi Grants Tax Incentive to Suburban Collection Showplace

on Grand River Avenue will soon be building an attached hotel, and owner Blair Bowman will not have to pay any property taxes on it for six years.

The Novi City Council granted the Showplace a 100 percent tax incentive with a vote of 4-2 at its meeting Monday.

The planned hotel would be a Hyatt Place with 100-140 rooms, estimated to be worth approximately $7.5-$10 million, according to the Showplace's incentive application. The proposal says the hotel will also provide 24 full-time jobs.

The Council at length at its meeting last week, and held public hearings at Monday's and last week's meeting for others to share their opinions.

"This issue is not about a hotel, as Mayor Landry said last week, it's about the viability of the Showplace," said member Wayne Wrobel. "It's a strong piece of our community; it needs to remain so. And in my book, if they need a hotel to remain viable, to continue to prosper, and all the surrounding hotels will continue to prosper, I see no reason not to give it to them."

Landry said that Novi does not grant tax breaks often, but in this case it is in the best interest of Novi.

"The Suburban Collection Showplace, other than , there's no other business that brings in 1.5 million people to the city of Novi, but the Suburban Collection Showplace does," Landry said. "The economic impact is in the hundreds of millions of dollars. We've heard from businesses saying when there's a show in town, there's more customers at our restaurants, there's more people at our shops, it's very important to the future of the city of Novi. And to me, it's not really difficult to imagine that an expo center with a hotel is going to draw more conventions than an expo center without a hotel."

Member Terry Margolis was absent from the meeting, and members Andrew Mutch and Justin Fischer voted against the tax break.

"I don't want it to be misconstrued that I don't believe that having a hotel at Suburban Collection Showplace is a good thing…if this was a zoning request, I would likely support this, but I believe that we need to look at this abatement as something completely different than that," Fischer said. "Everything that I've researched, everything I've read about this application, I don't believe that it brings any exceptional services or amenities…and because of that I don't believe it meets the intent of the a few weeks ago."

Bringing business to Novi

Fischer also said that he voted against the tax break because the situation is not unique enough to meet the city's policy.

"I don't buy the argument that the fact that it's attached to a convention center makes it exceptional or unique. Just any hotel attached to a convention center does not create a unique situation on any hand, nor do I buy the argument that the mere fact that the legislature carved out this legislation that in it of itself creates a unique situation," he said.

The Michigan Commercial Rehabilitation Act was amended this year to allow convention centers of at least 250,000 square feet that seek to build an attached hotel to apply for a tax incentive.

Mutch agreed that the potential economic impact of the hotel is not great enough for an incentive.

"I have no doubt that if this hotel is built and Mr. Bowman is able to attract the shows that he stated that he will be successful in bringing shows of the nature and size that he talks about, and I have no doubt that that's going to have a benefit to the city of Novi, but if the center was having the size of the effect that we've been told in the past that it's having on the local community, I just can't square that with the hotels coming out here and saying that they're not seeing the impact and they don't support the proposal," he said.

Several respresentatives from Novi hotels spoke at the public hearing last week, stating that their occupancies hover around 50-60 percent and that a 100-room hotel at the Showplace is not big enough to draw any conventions.

Bowman addressed the size issue at Monday's meeting. He has heard from more than 20 conventions that they would move their conventions to Suburban Collection Showplace if it had an attached hotel.

"The now 20 plus communications that meeting planners, not only meeting planners, but large-scale convention/conference planners are going out of their way to invest in this community frankly indicate that those types of events will use our facility if we had an attached hotel. It will not meet all the room needs, and that's the point we're tying to make," he said.

Bowman said the overflow from conventions would help hotels in the area.

Investing vs. losing money

Mutch also said he voted against the tax break because he believes government should provide a fair and level playing field for businesses.

"I don't feel comfortable getting into the financing whether its directly or indirectly of a particular business as we're doing in this case. I know people don't agree with that viewpoint, they feel like there's no taxes being paid, therefore nothing is being given up, but once a business comes to the city, every business has an impact on the city. Every business needs to contribute what I consider a fair share of their taxes," he said.

Wrobel said that granting the tax break will not hurt the city during the time the Showplace is not paying taxes.

"Right now we're collecting nothing at this location from the city. If we give them this for six years, we will collect nothing, but beyond six years we will be getting revenue from the hotel. So I think I'm going to forgoe the short-term gain for long-term gain," he said.