Several hotel owners are upset Philadelphia is using offering a tax break to help build a new Center City hotel.
City Council President Darrell Clarke says Philadelphia hotels frequently are built with city subsidies.
“I don’t know of a single hotel in the city of Philadelphia frankly speaking in the past couple of decades that has been built without some sort of subsidy, is it too much, we will have that conversation,” Clarke said.
The developer for the 700 room, upscale project on Chestnut Street between Broad and 15th Streets is seeking $33 million in Tax-Increment Financing grants from the city. Under this program, once the hotel is open and paying taxes, the city grants back this money so the developer can pay down loans more quickly. It would be part of the W chain of “boutique” hotels.
Sean Clancy, General Manager of the Lowes Philadelphia Hotel says there’s not enough demand for another large high-end property. He says the city would be helping a project that would cannibalize business from existing hotels.
“After adjusting for reductions at other hotel properties, the proposed project will not generate nearly the amount of tax increment or jobs that the developers claim and the city might well give away more money in subsidies than it receives in taxes,” Clancy said.
City council is planning a hearing on the matter.