Covington Hotel Project in Holding Pattern Until Tax Credits Announced
"I wish I had better news. I wish we had a check for $27 million and we can start tomorrow."
Guy van Rooyen, CEO of the Salyers Group which is developing the former Coppins department store building (and former Covington City Hall) into a boutique hotel, siad the project is stalled until federal New Market Tax Credits are announced.
When those credits will be announced is anyone's guess.
"We are sitting with a holding pattern on New Market Tax Credits," van Rooyen said. "They will be announced hopefully in May. It could be June and may even be July. We see New Market Tax Credits as a final piece. There's nothing we can do till that gets announced."
The Hotel Covington project was announced in the fall of 2012 with much fanfare and the City of Covington vacated the building a year later, moving city operations to a building on Pike Street, also owned by the Salyers Group, where the city now rents until it develops plans for a permanent home.
In January, the city commission rengotiated terms of the sale of the Coppins building and on Tuesday night extended the so-called "due diligence" phase for sixty days to allow for the announcement of New Market Tax Credits.
Van Rooyen is optimistic that the hotel project will benefit from the tax credits which aim to infuse capital for projects in urban areas in need of redevelopment opportunities.
"Covington is fortunate to be designated a New Market Tax Credit zone by the 2010 Census," van Rooyen said.
"No one's more disappointed than me that we're not already swinging hammers and building the hotel," he said. "We missed that (tax credit) window last year. Everything (depends) on the New Market program."
Meanwhile, the hotel developer cleared up any possible confusion with the recent announcement that a hotel project in Newport was awarded tax credits. Those credits, for a project adjacent to Newport on the Levee, are from the state and serve as sales tax rebates. Van Rooyen called the Newport development "a fantastic project" and said that those tax credits are also very difficult.
"We have the same application and have been assured by the Kentucky Cabinet we will receive those credits," he said. The minute a project gets them, he said, the clock starts ticking. The Hotel Covington will seek the credits after New Market Tax Credits are awarded.