DURHAM -- A $4.2-million incentive deal to help convert a landmark bank building into a four-star hotel goes before the City Council today.
Greenfire Development wants to remodel the 17-story SunTrust Building for the proposed Spark Hotel and Spa, with a total estimated cost of $52.7 million. The deal with City Hall would provide Greenfire Development with a $1 million loan for 16 years at a variable rate of interest and $3.2 million broken into annual cash installments from 2014 through 2028.
City Manager Tom Bonfield said he plans to present the deal at the council’s work session this afternoon and ask the council to schedule a public hearing at its Sept. 20 meeting.
Before Greenfire would actually get any of that money, the company would be required to start construction by July 31, 2011, finish within two years and demonstrate effort to contract Durham companies for the job and employ Durham residents for the 159 jobs the hotel is expected to create.
“I think the deal is fairly well-structured,” Councilman Mike Woodard said. “If they don’t perform, they don’t receive.”
The city’s finance office has estimated the project would produce $4.4 million in sales and occupancy taxes over a 20-year period. The proposed deal specifies that “City revenues dedicated to the project must be generated by the project” and/or from a special city fund for downtown revitalization projects.
In 2008, the city agreed to a $1.125 million incentive for Greenfire’s hotel as part of a $20-million incentive package for a proposed $284-million, 19-property plan to rebuild the area inside the Downtown Loop. Greenfire, however, failed to meet several construction-start deadlines, and the agreement is no longer in effect.
