NEW PORT RICHEY — Redevelopment of the historic Hacienda Hotel building could begin in earnest in 2014, as four firms expressed interest Monday in handling the project.
Tax credits could spur interest in not only reopening the Hacienda but also revitalizing downtown areas near the landmark at Main and Bank streets, according to Mario Iezzoni, the city's recently hired economic development director.
“The holidays have been kind of a concern” that might limit responses, Iezzoni said Monday. The strong interest in the project came as a relief to him and other city officials after applications were sent to about 30 firms.
“It's a great piece of property, which has tremendous potential,” Iezzoni said about the Hacienda.
The topic could come up for more discussion among New Port Richey city council members at a regular council meeting 7 p.m. Tuesday, Jan. 7, at City Hall, 5919 Main St.
City officials requested qualifications of companies by Dec. 30 in hopes of finding a firm that specializes in community projects with the option of tax credits to help with financing.
The four firms that submitted requests for qualifications packages are:
Legacy Lodging LLC, based in Birmingham, Ala. James Lewis is president.
Florida Motel Inc., based in Yulee. Abraham Rosner is president.
Charles Rutenberg Realty Inc. and Atlas Capital Advisors, based in Clearwater. Attorney Launa L. Lishamer was listed as the firm's representative for the Request for Quotation (RFQ).
Butler Snow LLC, based in Baton Rouge, La., represented by lawyer Claiborne P. Tanner, a member of the firm's public finance and incentives group, along with its banking, real estate and financial services group, according to the company website.
Once city leaders select semifinalists, developers will submit proposals specific to the Hacienda site. Those proposals probably would fall due in mid-February.
Negotiations with the city's top choice for a developer could start about March, according to Development Director Lisa Fierce.
After much fanfare had marked the 1927 opening of the Spanish-style Hacienda Hotel, the structure had fallen on hard times in recent decades.
The city bought the structure in 2004. Community Development Partners entered into a 2008 predevelopment agreement with the city, but then shelved the project because of the tight credit market during the recession.
For about five years, the boarded-up Hacienda sat vacant. Hundreds of residents volunteered to spruce it up early last year. The property began attracting nibbles of interest from developers last summer.
Council members were impressed by the 10-page packet that city staff put together for the RFQ.
“The city envisions this structure as a destination use,” the RFQ says. “Boutique hotel, banquet facility, fine dining restaurant, small meeting and events center or a bed and breakfast and/or hospitality venue.”
Two tax credits could make Hacienda redevelopment feasible, Iezzoni explained.
The federal new market tax credit began about 2005 “could be worth about $2 million from Uncle Sam” to any Hacienda developer, Iezzoni said. Over seven years, the credit can be worth about 39 percent, which could help offset a firm's tax bill, he said.
A developer could combine the new market tax discount with a historical preservation tax credit, producing an equity stake of around 52 percent, Iezzoni said.
A developer faces a challenge with the Hacienda project because the demand for a boutique hotel is hard to predict, Iezzoni pointed out. The costs are much easier to calculate.
A feasibility study in 2009 came up with a $145 room rate at 60 percent occupancy, Iezzoni recalled. That seems a bit high to him. A $120 room rate would be the “most conservative” number.
The 2009 proposal envisioned a multistory tower annex to expand beyond the 55 rooms in the original Hacienda structure.