In a capital lease structure, and the port owns a ground lease at a construction site and is able to abate sales taxes on construction materials purchased for building these sites.
Developer Crawford Hoying is investing about $44 million total into those two projects — the $33.5 million Marriott project and $10.5 million for the Sutton apartments, according to the Port Authority.
Incentive savings to the business —the sales tax abatement — is estimated to be $500,000 to $700,000 for both projects, depending on final costs that are eligible for sales tax savings, said Joseph Geraghty, executive director of the Port Authority.
Crawford Hoying unveiled plans in early 2020 to build a 134-room AC Hotel by Marriott on part of the Mendelson’s property across from what is now Day Air Ballpark.
The vote also approved a similar agreement for The Sutton, a Crawford-developed apartment building planned for the same area, a five-story apartment building on vacant land at 307 E. First St.
The new hotel would be a brief walk from the Fairfield Inn & Suites that the developer opened three years ago in the Water Street District. It will be six stories and will be almost 90,000 square feet, offering a lounge, media library, fitness center and meeting spaces.
The new hotel is also expected to have a rooftop bar and full-service restaurant that overlooks the baseball diamond, which could will be a major regional destination, the developer said last year.
The apartments property is essentially a grass field next to the Lincoln Storage building west of the Delco Lofts, which are 133 apartments that were developed by Crawford Hoying and its Water Street District partner, Woodard Development.
The Crawford Hoying strategy aims to remake the large Mendelson’s building on First Street into a mixed-use building, offering hotel, office, residential spaces and other uses, Geraghty noted.
The port doesn’t directly market or solicit this capital leasing service, noted Jerry Brunswick, a consultant for the port.
In an era of increased construction costs, the potential savings becomes important. “These are becoming more attractive because any dollar saved on the project is helpful,” Geraghty said of capital lease pacts.
Also, NorthPoint building VII, slated for construction near Dayton International Airport, is seeing its cost rise from $30 million to $40 million, Geraghty said, making a new vote on an amended capital lease agreement necessary. Port trustees originally approved involvement with the project in December.
Geraghty said port officials do not know who the tenant will be for that building.
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