We believe the City Council was right on Monday to agree to a package of financial incentives for what is the most promising proposal we have seen for breathing new life into the downtown Warrior Hotel building.
Planned is a $56 million renovation of the Warrior and Davidson Building in the 500 block of Sixth Street into a combination hotel and residential/commercial/retail complex. The project is part of the city's proposed Reinvestment District Program, which also involves construction of an agriculture/recreation center at the former site of the John Morrell plant in the old stockyards area; redevelopment to residential and commercial use by Ho-Chunk Inc. of several former industrial buildings in the 100 block of Virginia Street; and construction of a hotel and parking ramp next to the city's downtown Convention Center.
Strengthened by Warrior owner Lew Weinberg's agreement with developer Restoration St. Louis, a national-recognized company with expertise in historic renovation, the plan offers the city potential for rewards far greater than the risk involved in financial support. Today, the building produces nothing more than minimal property taxes based on the assessed value of an unused, long-empty shell. However, if its package of incentives helps push the project across the finish line, the city's return will include increased property taxes, hotel-motel taxes, sales taxes, and jobs, both construction and permanent. Also, a redeveloped Warrior and Davidson will help the city repay its Reinvestment District Program obligation to the state of Iowa faster.
If lack of support by the city resulted in the project falling through, the city would get nothing - no new tax revenue, no new jobs. The Warrior would remain what it is today.
By far, the biggest share of the city's $12 million incentives package is in the form of tax credits. Only $5 million of actual city money, in the form of a loan for infrastructure improvements, is involved (once $2.5 million of the loan is repaid, the other $2.5 million will be forgiven).
Is it worth $2.5 million to help get a $56 million deal and its potential for much, much bigger tax benefits and jobs far into the future done?
In our view, the answer is yes.