Commission denies hotel bonds for second time

CLOVIS - Defeated in their October effort to seek industrial revenue bonds through the city, a group of developers for a hotel in north Clovis made a second pitch Thursday with more favorable terms to the city.

But the devil was in the deal, not the details, as the commission again rejected a temporary tax abatement for the Xenia project by a 5-2 vote.

The project, when complete, will add 149 hotel rooms to the city and create 28 jobs. Chase Gentry, executive director of the Clovis Industrial Development Corporation, said based on a pitch of an 11-year, $410,000 property tax abatement, the IRB would provide an incentive of about $13,000 per job.

The IRB, Gentry said, would have Xenia pay 30% of its property taxes in the first year, with percentages increasing to the full amount once the IRB expires.

Developers said construction began before the pandemic started, and COVID-related relief wasn't an option because it wasn't an operating business. However, the pandemic has devastated their revenue stream and created a spike in building material prices.

"Even though we are not open," developer Danny Jariwala said, "that cost is still bearing upon us."

Parin Kumar, one of the developers, told commissioners she and her husband spent 18 years in Clovis and still have many investments in the area.

Gayla Brumfield, speaking on behalf of the Kumars, pointed to other ways their businesses have improved the city and that she didn't believe the commission would be setting a precedent given the pandemic and the size of the project.

Commissioners objected to the project in October for various reasons:

n The first issue was that while an IRB was allowable, the city had never approved one for a hotel.

Mayor Mike Morris, part of the Economic Incentive Board committee that moved the IRB on to the commission, discussed the spirit of IRBs and their intent to draw high-wage jobs.

"There's no question the Kumars and their partners are fantastic business owners, and their businesses and this property are tremendous assets to our community," Morris said before turning the matter over to commissioners. "I wanted to recognize that, but it's been explained this project is going to happen regardless. You're the policy makers. It's allowable, but is it the right thing to do?"

n Second, the project was never in jeopardy of ending due to the issues developers listed. Commissioner Leo Lovett felt the IRB was a long-term answer to a short-term problem, and noted Dion's chose to expand to Clovis during the pandemic without seeking city help.

"I feel like by the time this hotel is completed," Lovett said, "we would have run through most of COVID. They are very good business people. They will work through this with their current bank and they will have the opportunity to succeed with this property.

"We're making a decision, saying, 'Taxpayers, we want you to fund (the property tax abatements) ... and I can't ask the taxpayers to do this.'"

Lovett disclosed he had separate business dealings with some of the developers, but said it wouldn't impact his vote.

Commissioner Fidel Madrid said he didn't take issue with helping out the Xenia developers, as he's seen the impact of building material price hikes and that the city has provided more than $4 million in CARES Act relief to other businesses.

Madrid and Helen Casaus were the only votes in favor. Casaus was the lone voter for the IRB request in October, and said at the time the project would benefit the military community.

In other business at the Thursday meeting:

• Commissioners appointed Marcus Smith to their water policy advisory committee.

The vacancy was created when James Ridling resigned his position following election to the Curry County Commission.

Smith received five votes -- Commissioners Gary Elliott, Chris Bryant, Lauren Rowley, Casaus and Madrid. Thomas Martin received votes from District 1 commissioners Juan Garza and Lovett. Michael Lusk also applied.

• A second maintenance position was approved for the Clovis Regional Airport.

Airport Director James Harris said additional fixed-base operations at the airport have taken away from necessary maintenance.

City Manager Justin Howalt spoke in favor of the additional staffer.

"He's out there trying to take an asset and make it better," Howalt said of Harris. "I do fully support this. He did come asking for two additional employees. I said, 'Let's start things slow.'"

• The commission approved liquor license transfers for 11 Allsup's convenience stores due to a change in listed ownership. A public hearing drew no comments, and commissioners voted 7-0 to approve the licenses after noting nothing else changed about how the licenses would be used.

• The next commission meeting is scheduled for 5:15 p.m. March 4.