Developers of a downtown hotel ask for a lodging tax to help pay for the project.
Monday night, the Sioux Falls City council voted in favor of a $2 lodging tax at the new Hilton Garden Inn.
You can see heavy equipment tearing down the old parking ramp. It's one of the last structures standing in the way of a new downtown hotel.
While the Hilton Garden Inn hasn't even been built yet, we know guests will pay an extra $2 tax per night's stay. The lodging tax could have been a deal breaker on the whole project.
"It's an integral part of our whole financing package to make this happen," Hilton Garden Inn co-developer Craig Lloyd said.
Lloyd is one of the two developers planning to build the five-story Hilton Garden Inn. He says they negotiated a $4 million tax increment financing deal with the city because the hotel will generate significantly more revenue over the lumber yard that used to sit on the property.
"The first year, property taxes for the hotel and CNA building will be 25 times more the future earnings for Sioux Falls," Lloyd said
However, Lloyd says the project would have come up $1.4 million short without the council's approval of the lodging tax.
Aside from the final demolition of the River Ramp, Monday night's council meeting was the last hurdle for developers.
"Everything that could possibly go wrong, we've addressed with the city. They worked with us and the staff has been very cooperative. So we're pretty positive," Lloyd said.
At this time, the $2 tax only applies to rooms at the Hilton Garden Inn.
Developers expect to break ground on the hotel this summer and be open for guests by next June.