It seems that having Armbrust & Brown attorney Richard Suttle as the representative of the hotel developers I wrote about Monday may be a little too hot for some council members to handle.
On Tuesday morning, Council Members Bill Spelman, Sheryl Cole and Laura Morrison seemed skeptical that his clients need almost $4 million in city breaks to help to build a hotel downtown.
Students of city politics should note that the power base at city council has now shifted from Mayor Lee Leffingwell, Mayor Pro Tem Mike Martinez and Chris Riley — who are losing defeated incumbent Randi Shade — to the other council members, who are gaining Kathie Tovo next month.
Unless you have been living under a rock, you know that Suttle is also representing the Formula One developers. That team pulled back at the last minute from a request to have the city pay $4 million a year to host the race and instead offered to pay it all themselves.
Suttle basically told them that they have to “call now, supplies are limited” in order to get their very own hotel.
For his part, Assistant City Manager Rudy Garza — who has also fast-tracked a deal to add water lines to the F1 site — is also the one spearheading the hotel, it seems. Garza justified the spending for a new hotel by telling council that other cities give hotel developers $60 million to $100 million cash.
Cole replied that Austin is not in the same boat as other cities. People want to build here and come here even if we don’t throw money at them.
Some could say that the extra hotel tax along with increases in sales tax and wages/jobs will outweigh the revenue lost from waived fees and permits.
Sales tax goes to the general fund, just as the fees do. The general fund pays for basic city services, like police, fire and parks. Hotel tax, paid by room per night, is delivered to the convention and visitors bureau , the Convention Center Department and Cultural Arts Fund, under the economic development office, known as “EGRSO.”