Tax break for future Oak Ridge hotel goes forward
Oak Ridge Mayor Warren Gooch talks to Mayor Pro Tem Jim Dodson after a City Council meeting. (photo:Ben Pounds )
The hotel will be at 131 Tuskegee Drive behind Books-A-Million, Golds Gym, Dollar Tree and Rent-A-Center.
The City Council approved the city Industrial Development Board negotiating a 33% property tax abatement over at 10-year period.
It passed unanimously at the Monday, Sept. 11, meeting, although City Council members Charles Hope and Derrick Hammond were not present. Council member Ellen Smith made the motion, and Mayor Pro Tem James Dodson seconded.
“I think that the city of Oak Ridge could use this,” Industrial Development Board Chairman David Wilson said at an Aug. 14 City Council meeting.
He said the developer, Preetesh Patel, had already purchased the property.
Wilson said the city is currently averaging about 60% to 70% hotel room occupancy.
He said the hotel will support people coming to town temporarily to work on building new businesses such as TRISO-X, a nuclear fuel company looking to locate in Oak Ridge.
Patel told the City Council he owns eight hotels in Knoxville. He said construction workers stay there while working on Oak Ridge projects.
“There is a lot of revenue that’s going out of Oak Ridge city,” he said.
At that August meeting, the City Council voted 5-2 to table the issue until the next meeting, citing different concerns.
Mayor Warren Gooch at the time criticized the developer for not meeting with the Oak Ridge Budget and Finance Committee.
“Don’t try and go around the process; it’s there, and we stick to it,” he said.
Patel later met with the committee before the September meeting.
Smith in August disputed whether the project needed tax breaks.
Council Member Sean Gleason said it wouldn’t generate enough jobs to warrant the incentive.
“Motels and hotels don’t necessarily create jobs,” Wilson said in response.
“They do create sales tax, and they do create property taxes which can be identified as a great asset to the city of Oak Ridge.”
Smith said the planned hotel was in a floodplain and it wasn’t in the city’s interest to invest in a property with “potential future risks.”
“That doesn’t seem to me to bode well for the nature of the investment,” he said.
Patel said in response that he planned to have 65-foot buffers to prevent flooding on the property’s creek side.
By the September meeting, Patel had met with the Budget and Finance Committee, and Smith, Gleason and Gooch were more positive about the tax abatement.
Smith, who’s on that committee, said Patel had explained he needed the tax incentive due to unique costs.
She said the builder needed to do extra preparations to install pilings for the foundation, for example.
“I think this is a worthwhile way to make sure that a good use occurs on a property where we want to see people in the center of town,” Smith said.
Gooch said it was a matter of following procedure, and he was happy Patel had met with the committee.
“All’s well that ends well, and he has a good reputation, and I’m sure he will start pretty soon,” the mayor told The Courier News regarding Patel.