By CLINT FOSTER | Lone Star News Group
MINERAL WELLS – Mineral Wells is in the thick of an effort to kick start an unprecedented effort to revive the city’s most iconic and historic structure – the Baker Hotel.
Spearheaded by Southlake businessman Laird Fairchild, of Hunter Chase Capital Partners, the Baker Hotel development team has been creative in gathering the necessary financing for this $56 million project – now six years in the making – from a variety of sources.
A whopping 84 percent of the budget is made up of federal and state incentive capital in the form of federal and state historic tax credits, federal new market tax credits and an Environmental Protection Agency grant for lead and asbestos abatement, just to name a few.
The Baker development team says it has successfully secured all but $4 million of the project’s budget: a sum the City of Mineral Wells has obliged to cover by means of a 4B Economic Development Sales Tax. The city plans to establish what’s called a “Development Corporation” that can issue a $4 million bond, which the city can then pay off over a period of time with a portion of sales tax revenue. City Manager Lance Howerton said it won’t cost the citizens of Mineral Wells an extra dime.
“We’re not suggesting an increase in the sales tax rate, but reallocating the sales tax,” he said. “Essentially what you’re looking at is whatever is collected against the sales tax goes to pay those bonds off. So your property tax is not used to pay off these bonds. You’re not ‘pledging’ that, as they say. It’s a big difference.”
The City of Mineral Wells currently levies a 1.5 percent sales tax, the same rate since 1989.
“Last year, this generated $3.7 million in revenue – all of which went to the city’s general fund – from $250 million in taxable transactions. City officials are suggesting merely pulling one-eighth of a cent from the 1.5 cents of regular sales tax and directing that money toward paying off the investors who purchase $4 million dollar bond to finance the property’s revitalization.