The nine-member commission chose two out of six projects that had applied for sales-tax rebates under the state Regional Tourism Act. The act specifies that the incentives should be awarded to projects that demonstrate or state a capacity to bring out-of-state visitors and new tax dollars to the state, and are "extraordinary and unique."
The two ultimately selected were the hotel proposal, brought by the city of Aurora on behalf of hospitality company Gaylord Entertainment, and a proposal submitted by Pueblo to expand its riverwalk and convention center, as well as build a Professional Bull Riding University.
Ken Lund, the executive director of the state Office of Economic Development, recommended the Gaylord project -- and the Gaylord project alone. At the commission's meeting today, he said the proposed hotel matched "each and every element" of the RTA law and dismissed concerns that the hotel would siphon business from other Denver hotels, saying the law doesn't require that the threat of cannibalization be taken into account.Both projects were approved by a margin of 7-2 votes. Three out of the remaining four projects were rejected unanimously, while a proposal to develop a riverwalk in Glendale that would include a Rugby Hall of Fame got a single vote from former Denver mayor Wellington Webb. Each commission member was allowed to vote yes on two projects.
But that doesn't mean the two winners got everything they asked for. Both Gaylord and Aurora originally applied for a 95 percent sales tax rebate. But the commission voted instead to offer the project a rebate of 65.8 percent of the new sales taxes generated, which is estimated to be $2.7 million per year or $81.4 million over thirty years. (Aurora itself has offered to provide up to an additional $300 million in incentives to Gaylord.)
Pueblo was approved to receive a 24.7 percent rebate, which is estimated to be $493,000 annually, or $14.8 million over thirty years.
Webb and others said they hesitated to vote for Gaylord since the company previously stated that nothing less than a 95 percent rebate would do. Webb and Bill Sisson, a retired banker and former director of Sturm Financial Group, voted no on Gaylord.
In a statement, Gaylord CEO Colin Reed said, "We remain enthusiastic about the potential for our proposed Aurora development....we look forward to working with the commission over the coming months to finalize the details." According to Lund, the state now has 120 days to negotiate contracts on both projects. Lund's recommended terms for Gaylord include starting construction in 2013 and opening in 2016.
Wendy Mitchell, president and CEO of the Aurora Economic Development Council, said she's "confident we will find a way to make this work." The hotel is unlikely to be reduced in size, but may look at other ways to cut costs. Gaylord estimates it will cost more than $800 million to build the hotel. An analyst hired by the state estimated the hotel could create 2,546 jobs, both directly and indirectly.
One of those jobs could be for a Kung Fu Panda look-alike. Gaylord has an exclusive partnership with DreamWorks Studios and offers "family fun" packages that include parties hosted by Shrek and Kung Fu Panda at its four other hotels. Skadoosh!
More from our Business archive: "Gaylord hotel project: Meet the locals in love with it (and one guy against it)."