City Council Approves Tax Breaks for Hotel Project
UPDATE: Developers of the W Hotel and union representatives have reached a labor peace agreement that will allow the project to go forward. City Council reconvened at 2:20 p.m. and voted to approve tax breaks for the project by a 15 to 1 vote. Councilman W. Wilson Goode Jr. passed the lone vote against.
The tax breaks were the last piece of financing for the Center City development.
Developer Brook Lenfest emerged from a closed door meeting with labor leaders Thursday afternoon and said he felt as if he had "climbed Mount Everest." He said he was prepared to walk away from the project if Council had not passed the tax breaks Thursday.
He said he hoped construction could start in the next few months.
The rest of Thursday's Council action is detailed in an earlier post below:
In the last meeting of the year, Philadelphia City Council Thursday passed a raft of major legislation, including bills that would establish a land bank to deal with vacant and abandoned property and an independent board to set water and sewer rates, as well as legislation that would end the requirement that city elected officials resign to run for a new office.
The proposal to end the resign-to-run rule, sponsored by Councilman David Oh, now goes to the voters for approval at the May primary election. If approved, the change would not go into effect until 2016, after the next mayoral election.
Council took a half-hour recess about 12:40 p.m. to try to reach an agreement on a bill that would provide tax breaks for a $280 million, 50-story hotel development at 15th and Chestnut Streets.
The developers, Brook Lenfest and Jeffrey Cohen, are seeking a deal known as tax increment financing that would allow them to borrow $33 million and repay the loan over 20 years through tax breaks authorized by the city.
Unionized hotel workers urged Council to vote down the deal because the developers had not signed a "labor peace agreement" that would make it easier to organize future hotel workers. The two sides were talking behind the scenes throughout the morning.
Council President Darrell L. Clarke called the recess to allow them more time to reach an agreement.
The project would include two hotel brands – W and Elements. The developers have secured $40 million in other public financing and plan to invest more than $205 million in debt and equity. They had hoped to break ground on the project, which will take three years to build, by Jan. 1.
Bills to establish new rules for billboards and allow advertising on school property were either held or amended. Council members can consider those bills when they return from their winter break on Jan. 23.
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