Gilroy
– City Council has approved a debt repayment plan for Hilton
Garden Inn after the hotel fell $280,000 in arrears on tax revenues
promised under an economic incentive agreement with the city.
Gilroy – City Council has approved a debt repayment plan for Hilton Garden Inn after the hotel fell $280,000 in arrears on tax revenues promised under an economic incentive agreement with the city.
The payment plan council approved Monday night gives the Hilton five years to pay off the debt at varying interest rates. By the end of the contract, the Hilton will have paid $332,332 in principal and interest, although the plan allows for earlier repayment without penalties.
Hotel representatives, who first approached city leaders about negotiating a payment plan several months ago, did not return calls for comment.
The Hilton originally received $764,612 in up-front fee waivers on development costs as part of Gilroy’s economic incentive plan, designed to lure businesses to Gilroy by reducing business start-up costs. In exchange, the hotel promised to generate $859,000 in Transient Occupancy Tax revenues between July 2001 and July 2004.
The hotel company signed the deal two months before the Sept. 11 terrorist attacks, which hit the travel and service industry especially hard. The city is just now beginning to regain its footing as a travel destination in the region, according to local officials. They hope a series of new events, including festivals for art and wine, will reinvigorate the local service industry by attracting more visitors to the city during non-summer months.
