Paducah's riverfront hotel is gaining steam after applying this week for state tourism incentives.
Todd Cassidy, executive director of the Office of Financial Incentives with the Kentucky Tourism, Arts and Heritage Cabinet, confirmed an application had been received for tourism tax credits associated with the construction of a hotel in downtown Paducah.
The application will be reviewed by the Tourism and Development Finance Authority for preliminary approval. The board's next meeting is tentatively scheduled for April 9.
"It's one of the steps in our process of capitalizing the project," said David Malone, CFO of Senate Hospitality, one of the project partners.
The $19.2 million, six-story, 121-room riverfront hotel near the Julian Carroll Convention Center will include a restaurant that seats at least 50 that will be open for breakfast, lunch and dinner. It will also include a bar, but the details, theme and specifications are not complete. The deadline for the hotel to open set in the city agreement is June 1, 2015.
After the project receives preliminary approval, the board will contract with an independent consultant that will review the application more thoroughly. The applicant (in this case the hotel development group) will pay the consultant's fees. The seven-person state board will then review the consultant's findings to issue a final approval.
"If approved, the credits are entirely funded by sales tax revenue collected from future sales at the proposed hotel site in downtown Paducah," developer David Puckett said. "It's important to understand that the credits are not a handout. The hotel opening and doing several million dollars of sales annually will create a sales tax stream to fund the credits."
Senate Hospitality, Clark Development and Puckett are teaming up to build the hotel on the site of the Paducah Dome Pavilion, 600 N. Sixth St. A&K Construction will oversee the $19.2 million project, which is financed by Independence Bank. An agreement with the city of Paducah was announced in December.
In the three months since announcing the impending hotel construction, the design process has started. The tourism tax credits are another piece of the puzzle, and the group is in the process of applying for a franchise license, Malone said. Puckett said the application is in and being processed. The name of the hotel will be announced when the application is approved.
The city plans to front the group its tourism tax incentives. The state pays those incentives out over a long period of time - Cassidy said it takes about a decade to see total payout - so the city will give it the money up front with the idea that it will be paid back over 12 years. Developers and the city are expecting that amount to be $3.5 million.
Contact Corianne Egan, a Paducah Sun staff writer, at 270-575-8652 or follow @CoriEgan on Twitter.
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